FDIC considers holding loss-making assets of Silicon Valley Bank to facilitate auction completion

U.S. regulators are considering holding securities in Signature Bank and Silicon Valley Bank that have fallen below their bid prices, a move that would remove one of the potential hurdles to a sale of the banks, the Financial Associated Press reported. According to people familiar with the matter, this is a routine practice after the Federal Deposit Insurance Corporation (FDIC) takes over the bank, mainly to facilitate the acquisition transaction. Because if it involves assets that have fallen in value, it will be more difficult to sell the relevant banks. Signature's underlying assets could be between $20 billion and $50 billion, and Silicon Valley Bank between $60 billion and $120 billion, the people said. Both Silicon Valley Bank and Signature invested in bonds when interest rates were low, and those bonds have plummeted in value as the Federal Reserve has raised rates several times over the past year in response to surging inflation.