Canadian regulator seizes assets of Toronto branch of Silicon Valley Bank

OTTAWA –

Canada’s banking regulator says it has quickly seized property of the Canadian department of Silicon Valley Bank.

Fearful depositors withdrew billions of {dollars} from the U.S. financial institution in a matter of hours Friday, forcing U.S. banking regulators to urgently shut the California-based establishment.

In an announcement, Canada’s Office of the Superintendent of Financial Institutions says the financial institution operates on this nation as a overseas financial institution department based mostly in Toronto, which it supervises.

It says Superintendent Peter Routledge seized the Canadian property to protect their worth in mild of the choice by the California Department of Financial Protection and Innovation to close the financial institution down.

The assertion notes Silicon’s business in Canada is primarily lending to company shoppers, and that the department doesn’t maintain any industrial or particular person deposits in Canada.

The superintendent has additionally given discover of an intention to hunt everlasting management of the Canadian department’s property and is requesting the Attorney General of Canada apply for a winding-up order.

“By taking momentary management of the Canadian department of Silicon Valley Bank, we’re performing to guard the rights and pursuits of the department’s collectors,” Routledge stated within the assertion that introduced the momentary seizure.

“I want to be clear: the Silicon Valley Bank branch in Canada does not take deposits from Canadians, and this situation is the result of circumstances particular to Silicon Valley Bank in the United States.”

The assertion famous the U.S. Federal Deposit Insurance Corporation was appointed as receiver.

Silicon Valley Bank served largely know-how employees and enterprise capital-backed corporations, together with a few of the trade’s best-known manufacturers.

It was the second largest financial institution failure in U.S. historical past after the collapse of Washington Mutual in 2008.

U.S. Treasury Secretary Janet Yellen stated Sunday that the federal authorities wouldn’t bail out Silicon Valley Bank, however is working to assist depositors who’re involved about their cash.

She reassured Americans throughout an interview with CBS’ “Face the Nation” that there will likely be no domino impact after the collapse of Silicon Valley Bank, and that the American banking system is protected and effectively capitalized.

Canada’s regulator stated it has intently monitored Silicon Valley Bank’s Canadian department for the reason that onset of the financial institution’s difficulties. It additional acknowledged that in keeping with globally accepted worldwide Basel III requirements, it “continues to undertake diligent supervision of federally regulated banks in Canada, including robust requirements for capital and liquidity adequacy.”

This report by The Canadian Press was first printed March 13, 2023.