Ottawa/CMEDIA: Assets of the Canadian branch of Silicon Valley Bank have been temporarily seized, Canada’s banking regulator reportedly said.
In a matter of hours Friday billions of dollars from the U.S. bank were withdrawn by the fearful depositors, forcing U.S. banking regulators to urgently close the California-based institution.
Canada’s Office of the Superintendent of Financial Institutions said in a statement the bank operates in this country as a foreign bank branch based in Toronto, which it supervises.
The statement also said that in light of the decision by the California Department of Financial Protection and Innovation to shut the bank down the Superintendent Peter Routledge seized the Canadian assets to preserve their value
Silicon’s business in Canada is primarily lending to corporate clients, the statement noted , and that the branch does not hold any commercial or individual deposits in Canada.
The superintendent has also noted his intention to permanently control the Canadian branch’s assets and is requesting the Attorney General of Canada apply for a winding-up order.
“By taking temporary control of the Canadian branch of Silicon Valley Bank, we are acting to protect the rights and interests of the branch’s creditors,” Routledge said in the statement that announced the temporary seizure.
“I want to be clear: the Silicon Valley Bank branch in Canada does not take deposits from Canadians, and this situation is the result of circumstances particular to Silicon Valley Bank in the United States.”
U.S. Federal Deposit Insurance Corporation was appointed as receiver, noted the statement.
Mostly technology workers and venture capital-backed companies including some of the industry’s best-known brands were served by the Silicon Valley Bank.
U.S. Treasury Secretary Janet Yellen said Sunday that in the wake of this being second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008, the federal government is working to help depositors who are concerned about their money.
Since the onset of the bank’s difficulties, Canada’s regulator has been reportedly closely monitoring Silicon Valley Bank’s Canadian branch and stated that consistent with globally accepted international Basel III standards, it “continues to undertake diligent supervision of federally regulated banks in Canada, including robust requirements for capital and liquidity adequacy.”
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