Silicon Valley Bank collapsed in spectacular fashion earlier this month, with the Federal Deposit Insurance Corporation putting the bank into a federal receivership. This is the largest collapse of an FDIC-insured bank since the 2008 financial crisis and the second largest in history, with more than $200 billion in assets involved. FDIC receiverships for two other large banks, Silvergate Bank and Signature Bank, quickly followed. The holding companies for all three banks are expected to enter bankruptcy soon.
What is an FDIC receivership?
Unlike most other businesses, an operating bank cannot seek relief in bankruptcy. (A bank holding company may reorganize in bankruptcy, though.) Rather, an operating bank is subject to its own insolvency regime, namely the FDIC receivership.