Australian’s frantic dash to pull money out of collapsed US bank

The US Federal Deposit Insurance Corporation, a government regulator, has assured all SVB depositors that they will be able to access their balances in full after the bank collapsed on Friday following a bank run. It was triggered by questions about SVB’s stability as interest rate rises tanked the value of some of its investments and spurred its base of start-up clients to withdraw their deposits. The cost of making deposits whole will be repaid by wiping out SVB’s shareholders and selling the bank. Any shortfall will be made up by a levy on other banks in America.

But Sand had already booked his tickets before that announcement came through. He does not regret it, even as other depositors have been content to wait and receive their money via wire transfers, which several start-ups have reported are starting to clear.

“It’s one thing to be online,” Sand said. “It’s another to pick up the phone, it’s another thing to be there in person, and we want to act to protect the money that our investors put into us and that is used to pay our team and financial hardware for our projects.”

Strong Compute raised $11 million from investors in the middle of last year. Sand won’t say how exactly much money it had put into SVB, but said it was significantly more than the $US250,000 ($377,000) the US government insures per account and a “material” amount for the company.

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SVB is currently operating as a “bridge bank” under the auspices of the US government until its depositors’ money can be returned or the bank is sold. Its newly installed chief executive, Tim Mayopoulos, told customers it was “business as usual” for the bank on Tuesday, The New York Times reported.

Despite the protection offered to SVB’s depositors, the crisis created by its failure has some distance to run. The share price of several regional US banks has plummeted over the past week as investors reassess the value of their assets, triggering trading halts and a reassuring statement from US President Joe Biden.

Regulators shut a second bank on Monday, Signature Bank of New York, which had focused on the real estate, legal and cryptocurrency industries, as investors endure a nervous wait to see if regulators’ interventions have been enough.

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