Silicon Valley Bank collapsed in spectacular fashion earlier this month, with the Federal Deposit Insurance Corporation placing the bank in federal receivership. This is the largest collapse of an FDIC-insured bank since the 2008 financial crisis and the second largest in history, with more than $200 billion in assets involved. FDIC bailouts for two other major banks, Silvergate Bank and Signature Bank, soon followed. The holding companies for all three banks are expected to go bankrupt soon.
What is an FDIC receivership?
Unlike most other companies, an operating bank cannot seek relief in bankruptcy. (However, a bank holding company can reorganize in bankruptcy.) Rather, an operating bank is subject to its own insolvency regime, namely the FDIC receiver.