Silicon Valley Bank becomes biggest bank since 2008 financial crisis to be taken over by FDIC

SVB Financial Group’s Silicon Valley Bank on Friday become the first major bank since the global financial crisis in 2008 to be taken over by the Federal Deposit Insurance Corp. in a sudden demise for a once-mighty lender to technology companies in its namesake region.

Jay Ritter, Cordell Eminent Scholar, said a rescue by one of the nation’s big banks seemed less likely, in light of an “anti-bigness” posture within the administration of President Joe Biden.

The FDIC could still include some sweeteners to work out a deal, like offering to cover losses from soured loans, and other banks could still step in to fill any hole the bank leaves in the IPO market.

“Certainly there will be some losses,” he said. “Not every tech company that they have lent money to is going to be successful.”

Read more insights from Ritter in this story from MarketWatch.