According to sources, Silicon Valley Bank employees were given 45 days of employment and 1.5 times their salaries by the US Federal Deposit Insurance Corporation.
In-depth details about SVB bank employees received bonuses just hours before the bank gets shutdown
Although declining to comment on the specifics to CNN, an FDIC representative claimed that it is usual procedure and one of the first things the independent government agency does after being appointed receiver.
Only hours before the FDIC took control of the failed lender, American employees also earned their annual bonuses on Friday, according to Axios.
In a shocking 48 hours, a bank run and a capital crisis caused SVB to collapse, becoming the second-largest financial institution failure in US history.
The tech lender was shut down by California regulators, who then gave the FDIC control of it.
As receiver, the FDIC will normally sell off the bank’s assets to reimburse its clients, including depositors and creditors.
Workers were instructed to continue working remotely, excluding essential and branch personnel, according to Reuters. Towards the end of 2022, the bank employed around 8,500 people.
The FDIC said that SVB’s main office and all 17 of its Massachusetts and California-based branches would reopen on Monday.
All insured depositors will have complete access to their protected deposits by no later than Monday morning, according to the FDIC, an independent federal body that insures bank deposits and regulates financial institutions. It stated that a “advance dividend will be paid to uninsured depositors during the next week.”
The FDIC took control Friday morning instead of waiting until the markets closed.
“SVB’s condition deteriorated so swiftly that it couldn’t last just five more hours,” writes Better Markets CEO Dennis M. Kelleher. “That’s because the bank’s depositors were withdrawing money so quickly that the institution became insolvent, and an intraday closure was not avertable owing to a classic bank run,” the author explains.