In a flurry of activity, in less than a week the Silicon Valley Bank (SVB) collapsed, government officials took over the bank, the U.S. Treasury and the Central Bank guaranteed depositors, the old board was dismissed and the Federal Deposit Insurance Corporation (FDIC) named Tim Mayopoulos as the new CEO of the bank.
Government and financial industry leaders coordinated the whirlwind of activity to assure customers and prevent widespread panic.
Mayopoulos replaces former CEO Greg Becker. Mayopoulos is the former CEO for Fannie Mae.
In his first communication to patrons, Mayopoulos assured all the bank is open and “conducting business as usual.”
SVB is now officially known as a “bridge bank.” According to Investopedia, SVB’s new designation identifies it as an “institution that has been authorized by a financial regulator to operate a failed or insolvent bank until a buyer is found or the bank’s assets are liquidated.”
The new CEO, wrote to bank depositors:
“I recognize the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve. I have joined the company as CEO starting today.”
Mayopoulos’ letter explained that the FDIC “transferred all deposits and substantially all assets of the former Silicon Valley Bank to a newly created, full-service FDIC-operated bridge bank. Mayopoulos assured that depositors have “full access to their money.”
Mayopoulos continued: “I come to this role with humility. I also come to this role with experience in these kinds of situations. I was part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and I served as the CEO of Fannie Mae from 2012-18.”
Mayopoulos also noted that his role as president of a Silicon Valley-based software firm “that provides technology to financial institutions to serve their consumer banking customers” helps him to appreciate the unique needs SVB faces.
The new CEO wrote: “I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem. We look to restore your confidence and support you and your companies at this time.”
Silicon Valley Bank executive Gerald Brady lauded Mayopoulos for the professional and calming email: “Love seeing this note from our new CEO at SVB — thanks Tim Mayopoulos for a clear message: we are open for business and your deposits are protected.”
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