On Monday, Silicon Valley Bank’s new CEO, Tim Mayopoulos, reassured clients that the bank is “open” and “conducting business as usual” following the collapse of the nation’s 16th-largest bank, which sparked fears of a major economic crisis.
Mayopoulos was named CEO of the newly created bridge bank, Silicon Valley Bank N.A., by the Federal Deposit Insurance Corporation (FDIC) on Monday, after the start-up-focused lender was closed by federal regulators on Friday.
A bridge bank is a temporary institution that operates a failed or insolvent bank until a buyer is found or the bank’s assets are liquidated, according to Investopedia.
The FDIC transferred all deposits of the defunct SVB Financial Group to Silicon Valley Bank N.A.
Mayopoulos sent clients a lengthy email to say that the lender remains open and operating normally, and assured depositors that they “have full access to their money.”
He noted that the FDIC has “transferred all deposits and substantially all assets of the former Silicon Valley Bank to a newly created, full-service FDIC-operated ‘bridge bank’ in an action designed to protect all depositors of Silicon Valley Bank.”
Mayopoulos, the former head of Fannie Mae, explained that he comes to his new role with experience in similar situations, having been part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and having served as CEO of Fannie Mae from 2012-18.
He also noted that he served as president of a Silicon Valley-based software firm “that provides technology to financial institutions to serve their consumer banking customers.”
Mayopoulos concluded his email by stating, “We look to restore your confidence and support you and your companies at this time.”
Gerald Brady, a Silicon Valley Bank executive, praised Mayopoulos for his clear message in the email, saying, “Love seeing this note from our new CEO at SVB.”
Silicon Valley Bank’s sudden collapse has sparked contagion fears throughout the banking industry, and it is the largest US bank collapse since the 2008 economic crisis.