The German financial regulator, BaFin, announced on Monday that Silicon Valley Bridge Bank (SVB) has received authorisation to operate its lending business through its branch in Germany. The announcement follows a previously imposed a ban on disposals and payments on SVB in Germany.
In a statement published on Monday, BaFin confirmed that SVB Germany had taken over all of Silicon Valley Bank Germany Branch’s business operations. BaFin has also confirmed that the moratorium it imposed on the Silicon Valley Bank Germany Branch on March 13, 2023, does not affect SVB Germany.
Following its closure by California banking regulators, SVB moved its equity, receivables, and liabilities to the bridge bank, and subsequently applied for permission from BaFin to commence operations for clients.
SVB Financial filed for bankruptcy protection on Friday, approximately a week after the closure of Silicon Valley Bank, which was the most massive US bank failure since the 2008 financial crisis.
Silicon Valley Bank Germany Branch began providing lending services to local clients in 2018, but did not offer deposit services. BaFin classified the branch as non-systemically significant, which implies that its potential failure would not endanger the stability of the local monetary system. Going forward, the operations previously prohibited by BaFin will be carried out by a new branch under the name SVB Germany.
SVB’s collapse earlier in March sent the the financial markets in uncertainty which also affected the global bank stocks, causing Swiss financial institution, Credit Suisse, to record lows. This led to Credit Suisse’s problems rapidly worsening and ultimately resulted in the bank being acquired by banking giant, UBS, for $3.25 billion and taking on up to $5.4 billion in losses.
The acquisition was supported by Swiss regulators in order to prevent a potential banking crisis, however, it caused a backlash in global markets on Monday.
