FDIC extends bidding for Silicon Valley Bank

March 20 (UPI) -- The Federal Deposit Insurance Corp. extended the bidding for Silicon Valley Bridge Bank on Monday, allowing the option for its private banking subsidiary to be sold off separately.

The FDIC said in a statement that while there has been "substantial interest from multiple parties," it could expand the pool of suitors by allowing the bank and private banking portion of the business to be separated.

"Qualified, insured banks and qualified, insured banks in alliance with nonbank partners will be able to submit whole-bank bids or bids on the deposits or assets of the institutions," the FDIC said.

The FDIC said vendors and counterparties with contracts with the bridge bank are legally obligated to continue commitments under their contracts. It added that Silicon Valley Bridge Bank is still fully able "to make timely payments to vendors and counterparties and otherwise perform its obligations under the contract."

Last week, HSBC purchased the British subsidiary of Silicon Valley Bank for $9.7 billion. That deal was arranged by the Bank of England, working with H.M. Treasury, the Prudential Regulation Authority and the Financial Conduct Authority under financial crisis-era emergency powers.

SVB Financial Group, the former parent of Silicon Valley Bank, filed for Chapter 11 bankruptcy in New York on Friday. SVB Financial Group said then while it is the holding company for SVB Capital and SVB Securities, both of those businesses are not part of the bankruptcy.

California regulators shut down Silicon Valley Bank on March 10, making it the first FDIC-insured bank to fail in more than two years. Days later, regulators closed Signature Bank, another tech-focused lender, sending fears of a widespread banking panic.