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Friday, they became FDIC employees. How long they remain FDIC employees is probably an open question, depending on role and the ultimate disposition of the bank

by mixdup 4y ago

paxys 4y ago
"FDIC employees" doesn't sound accurate. They are still employees of the same bank, just that the bank is now run by the FDIC. They are not all suddenly Federal government employees.
- mixdup 4y ago
  No, the bank they worked for is no longer in business. The FDIC created a new bank, the Deposit Insurance National Bank of Santa Clara, and transferred all of SIVB's deposits to the DINB. On Monday, all of the physical branches of SIVB will open as branches of DINB https://www.fdic.gov/news/press-releases/2023/pr23016.html https://www.fdic.gov/news/press-releases/2023/pr23016.html
  - NordSteve 4y ago
    To clarify: The new bank "Deposit Insurance National Bank of Santa Clara" (DINB) received "all _insured_ deposits of Silicon Valley Bank", and is intended to open for business on Monday. The remainder of SVB (including loans and uninsured deposits) are now held by FDIC as conservator/receiver of the failed bank.
    - mixdup 4y ago
      Fair, I should've clarified that DINB does not have every penny that SIVB had. However, the point still stands: The tellers at the window on Monday will be working for DINB (which is owned by the FDIC) not SIVB Even beyond that point, though, the FDIC now owns Silicon Valley Bank so even everyone else who worked for the bank that didn't transfer to DINB still now works for the FDIC (as long as they're still employed--which is probably a rapidly shrinking amount of time) https://www.sec.gov/ix?doc=/Archives/edgar/data/719739/000119312523067777/d450664d8k.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/719739/00011... >On March 10, 2023, SVB Financial Group’s (the “Company”) wholly owned subsidiary, Silicon Valley Bank (the “Bank”) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation was appointed as receiver. The Company is no longer the parent company of the Bank. Even if someone remains on the payroll of Silicon Valley Bank, they are an employee of the FDIC since it now owns Silicon Valley Bank SIVB did have a holding company, so not every single employee of the company moved to the FDIC. Those at the holding company, not the actual bank, most certainly didn't transfer to the FDIC
- encoderer 4y ago
  But the federal government (fdic) will pay them, pay their accrued holiday pay, etc.
  - paxys 4y ago
    The federal government pays a vast number of people a vast amount of money every day. Not all of them are employees.
    - encoderer 4y ago
      Splitting hairs.
    - mixdup 4y ago
      Usually the FDIC has another bank buy the failed bank, and the employees would become employees of the purchasing bank In this instance, the FDIC wasn't able to find a buyer so all these people work for the FDIC until final disposition of their jobs SIVB no longer exists as an operating bank, they are going to work on Monday, who are they working for if not the FDIC?
  - auntienomen 4y ago
    The FDIC isn't the federal government. It is not supported by tax dollars. It's funded by fees FDIC charges to the banks it insures.
    - skissane 4y ago
      FDIC is an agency established and granted powers under US federal law, and its chair is nominated by the President, subject to Senate confirmation. Fundamentally, it is just as much part of the US federal government as any other independent federal agency, such as the CIA or EPA or NASA, is. The fact that, unlike most other federal agencies, it gets its funding through hypothecated taxation rather than general revenue, doesn't make it any less of a federal agency. Also, while the law may call them "fees", they are taxes – it is not like banks have a choice in paying them – just because the law doesn't call something a "tax", doesn't make it not a tax (see National Federation of Independent Business v. Sebelius)
- dredmorbius 4y ago
  There was a really good explainer podcast by NPR's Planet Money back in 2009 on the FDIC takeover of a community bank in Washington State which covers this: "Anatomy Of A Bank Takeover" (2009) On a mid-January night, some 80 agents of the Federal Deposit Insurance Corp. pull into Vancouver, Wash. Their rental cars are generic, their arrival times staggered. One by one, agents check into a hotel, each quietly offering a pseudonym to the guy at the desk. They're here to take over the Bank of Clark County, which the FDIC has decided is insolvent. It's the agency's job to insure American bank deposits and to step in when a bank fails. The FDIC tries to keep the planning for its operations top secret, to avoid sparking a panicked run on the bank. ... <https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-takeover https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-t...> Specifically as to who the employees of the failed bank work for: The FDIC agents announce that, through the weekend, the staffers will be temporary employees of the FDIC. Stay and help us, the agents say. FDIC liquidators themselves often come from previously-failed banks as well, though that's a small fraction of former banks' employees.

Friday, they became FDIC employees. How long they remain FDIC employees is probably an open question, depending on role and the ultimate disposition of the bank

by mixdup 4y ago

Friday, they became FDIC employees. How long they remain FDIC employees is probably an open question, depending on role and the ultimate disposition of the bank

paxys 4y ago

"FDIC employees" doesn't sound accurate. They are still employees of the same bank, just that the bank is now run by the FDIC. They are not all suddenly Federal government employees.

mixdup 4y ago
No, the bank they worked for is no longer in business. The FDIC created a new bank, the Deposit Insurance National Bank of Santa Clara, and transferred all of SIVB's deposits to the DINB. On Monday, all of the physical branches of SIVB will open as branches of DINB https://www.fdic.gov/news/press-releases/2023/pr23016.html https://www.fdic.gov/news/press-releases/2023/pr23016.html
- NordSteve 4y ago
  To clarify: The new bank "Deposit Insurance National Bank of Santa Clara" (DINB) received "all _insured_ deposits of Silicon Valley Bank", and is intended to open for business on Monday. The remainder of SVB (including loans and uninsured deposits) are now held by FDIC as conservator/receiver of the failed bank.
  - mixdup 4y ago
    Fair, I should've clarified that DINB does not have every penny that SIVB had. However, the point still stands: The tellers at the window on Monday will be working for DINB (which is owned by the FDIC) not SIVB Even beyond that point, though, the FDIC now owns Silicon Valley Bank so even everyone else who worked for the bank that didn't transfer to DINB still now works for the FDIC (as long as they're still employed--which is probably a rapidly shrinking amount of time) https://www.sec.gov/ix?doc=/Archives/edgar/data/719739/000119312523067777/d450664d8k.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/719739/00011... >On March 10, 2023, SVB Financial Group’s (the “Company”) wholly owned subsidiary, Silicon Valley Bank (the “Bank”) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation was appointed as receiver. The Company is no longer the parent company of the Bank. Even if someone remains on the payroll of Silicon Valley Bank, they are an employee of the FDIC since it now owns Silicon Valley Bank SIVB did have a holding company, so not every single employee of the company moved to the FDIC. Those at the holding company, not the actual bank, most certainly didn't transfer to the FDIC
encoderer 4y ago
But the federal government (fdic) will pay them, pay their accrued holiday pay, etc.
- paxys 4y ago
  The federal government pays a vast number of people a vast amount of money every day. Not all of them are employees.
  - encoderer 4y ago
    Splitting hairs.
  - mixdup 4y ago
    Usually the FDIC has another bank buy the failed bank, and the employees would become employees of the purchasing bank In this instance, the FDIC wasn't able to find a buyer so all these people work for the FDIC until final disposition of their jobs SIVB no longer exists as an operating bank, they are going to work on Monday, who are they working for if not the FDIC?
- auntienomen 4y ago
  The FDIC isn't the federal government. It is not supported by tax dollars. It's funded by fees FDIC charges to the banks it insures.
  - skissane 4y ago
    FDIC is an agency established and granted powers under US federal law, and its chair is nominated by the President, subject to Senate confirmation. Fundamentally, it is just as much part of the US federal government as any other independent federal agency, such as the CIA or EPA or NASA, is. The fact that, unlike most other federal agencies, it gets its funding through hypothecated taxation rather than general revenue, doesn't make it any less of a federal agency. Also, while the law may call them "fees", they are taxes – it is not like banks have a choice in paying them – just because the law doesn't call something a "tax", doesn't make it not a tax (see National Federation of Independent Business v. Sebelius)
dredmorbius 4y ago
There was a really good explainer podcast by NPR's Planet Money back in 2009 on the FDIC takeover of a community bank in Washington State which covers this: "Anatomy Of A Bank Takeover" (2009) On a mid-January night, some 80 agents of the Federal Deposit Insurance Corp. pull into Vancouver, Wash. Their rental cars are generic, their arrival times staggered. One by one, agents check into a hotel, each quietly offering a pseudonym to the guy at the desk. They're here to take over the Bank of Clark County, which the FDIC has decided is insolvent. It's the agency's job to insure American bank deposits and to step in when a bank fails. The FDIC tries to keep the planning for its operations top secret, to avoid sparking a panicked run on the bank. ... <https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-takeover https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-t...> Specifically as to who the employees of the failed bank work for: The FDIC agents announce that, through the weekend, the staffers will be temporary employees of the FDIC. Stay and help us, the agents say. FDIC liquidators themselves often come from previously-failed banks as well, though that's a small fraction of former banks' employees.