It seems Silicon Valley Bank, shuttered over the weekend to protect a run on deposits, is back to business as usual.
Earlier today, newly appointed CEO Tim Mayopoulus sent an email to customers assuring the bank was doing everything to “rebuild, win back confidence, and continue supporting the innovation economy.”
Mayopoulus urged customers to remain with the bank, leaving deposits in existing accounts, and advised them that the transfer of any funds made over the last few days had been canceled.
New loans and access to existing credit lines have been made available, and the bank is “actively opening new accounts.”
“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that were left over the last several days,” read the note.
He cited the FDIC’s protection of deposits as making the bank at the center of the second-largest bank failure in the U.S., “the safest of any in the country.”
A bittersweet marketing pitch for the founders left just days ago in despair and chaos over their ability to keep their businesses going.
For those caught at the center of the tempest, the change in tone is surprising.
While many assumed the bank would continue to work normally to attract potential buyers, the active search for new customers and opening of new credit lines does not give the air of a company looking to wind down operations.
A different fate for the bank’s C-Suite
Also today, it was announced that the Justice Department had opened an investigation into the collapse of the bank and the actions of those at the helm.
Already the SEC has unearthed the sale of $3.6 million in shares, made by a trust belonging to CEO Greg Becker, as the bank embarked on its downward spiral in February.
On Sunday, SEC Chair Gary Gensler said the agency would mainly focus on “identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly.”
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One of the driving factors for the bank’s demise is said to have been the relaxing of safeguards put in place after the 2008 financial crisis. Becker was one of many executives that encouraged banking deregulation in 2018, shifting the asset threshold for stricter regulatory safeguards on banks from $50 billion to $250 billion.
Due to this change, the bank, and many others, could avoid annual “stress tests,” a detail that could have demonstrated the risks that spelled SVB’s eventual demise.
Former Rep. Barney Frank, a co-sponsor of the Dodd-Frank Act, which set these safeguards in motion, is also said to have supported the deregulation since his retirement. Frank sat on the board of Signature, another of the banks closed by regulators over the weekend.
