The FDIC has brought in the investment bank Piper Sandler to auction off Silicon Valley Bank, kicking off a high stakes sales process for the collapsed lender, according to two market sources who were granted anonymity to discuss the sale.
Lawmakers have been pressuring federal officials to outline their long-term plans for the defunct bank since it was shut down by California officials on Friday.
The FDIC declined bids submitted by other financial institutions in a separate auction held over the weekend, according to four lawmakers who’ve been briefed on the matter, a decision that has frustrated some Congress members who would’ve preferred to see Silicon Valley Bank acquired.
“I think it's deeply concerning,” Sen. Bill Hagerty (R-Tenn.) said in an interview late Tuesday. “The notion that they're going to do better as this asset turns into a carcass? … It's hard for me to understand how that’s the best answer.”
The FDIC declined comment. Piper Sandler did not immediately respond to a request for comment.
Banking regulators and Biden officials ultimately determined that emergency measures to backstop the bank’s uninsured depositors — which included roughly half of all Silicon Valley-backed businesses — would provide more clarity and calm amid fears of a possible financial contagion.
Signature Bank, a New York institution that had been a key banking partner to major crypto businesses, was also shuttered by regulators on Sunday.
The credit ratings agency Fitch Ratings on Wednesday downgraded First Republic, another lender whose shares have been battered in the days since SVB went under. The ratings agency also warned that the regional banking crisis could spill over into the broader market, including insurance businesses and investment funds.
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