Following the collapse of Silicon Valley Bank (SVB), the Federal Deposit Insurance Corp (FDIC) has offered employees 45 days of employment at 1.5 times their regular pay.
The FDIC, which took control of SVB on Friday, communicated this offer to staff via an email titled “Employee Retention,” according to information obtained by Reuters.
Employees will receive details about benefits over the weekend, with healthcare information being provided by SVB’s former parent company, SVB Financial Group.
As of the end of last year, SVB had a workforce of 8,528 employees.
Staff members were instructed to continue working remotely, except for essential personnel and those working in branches.
The FDIC has not commented on the situation further at this time.
The collapse of SVB occurred after depositors, worried about the bank’s financial stability, rushed to withdraw their funds in a two-day frenzy.
The sudden bank run caught many by surprise, causing shockwaves in the market and leading to a loss of over $100 billion in market value for U.S. banks.
At the end of last year, SVB was the 16th largest bank in the United States, managing around $209 billion in assets and $175.4 billion in deposits.
“Everyone is working with FDIC to stabilize the situation as quickly as possible,” stated California Governor Gavin Newsom.
The FDIC announced that SVB’s main office in Santa Clara, California, along with its 17 branches in California and Massachusetts, will reopen on Monday.
SVB Securities, a broker-dealer linked to the bank’s former parent group, clarified on Saturday that it would not be directly affected by the bank’s collapse.
Meanwhile, hedge funds are reportedly making offers to businesses with deposits stuck at SVB, with some offering as little as 60 cents on the dollar for stranded funds, according to a report by Semafor.
The FDIC’s quick action aims to stabilize the fallout from SVB’s unexpected failure while exploring options to protect depositors and maintain market confidence.
