Here's what could happen next for Silicon Valley Bank customers

Silicon Valley Bank's customers, on with investors and bankers crossed the globe, are waiting for an announcement from U.S. regulators astir what comes adjacent aft the largest bank nonaccomplishment since 2008.

The Federal Deposit Insurance Corporation (FDIC) said Friday that SVB would reopen connected Monday morning, nether the power of the recently created Deposit Insurance National Bank of Santa Clara. Once that happens, insured depositors with up to $250,000 successful their accounts volition beryllium capable to entree their money.

But the bulk of deposits astatine SVB were not insured, and it is unclear erstwhile those customers volition beryllium capable to entree their wealth — oregon whether they volition get each of it back. SVB's relation arsenic a cardinal slope for start-ups and different venture-backed companies means that galore firms could conflict to conscionable payroll and different obligations if their wealth is not rapidly recovered.

Many investors connected Wall Street and successful Silicon Valley are anticipating further accusation to beryllium announced astatine immoderate constituent connected Sunday. Here's a look astatine immoderate of the paths guardant from here.

Treasury Secretary Janet Yellen said Sunday that a bailout of SVB is not connected the array but that regulators are exploring different options.

"We are acrophobic astir depositors and are focused connected trying to conscionable their needs," Yellen said connected CBS' "Face the Nation."

"This is truly a determination for the FDIC, arsenic it decides connected what the champion people is to resoluteness this firm," she added.

One imaginable enactment could beryllium to usage the FDIC's systemic hazard objection instrumentality to backstop the uninsured deposits astatine SVB. Under the Dodd-Frank Act, that determination would request to beryllium made successful performance with the Treasury Secretary and the Federal Reserve.

Additionally, Bloomberg News reported connected Saturday that regulators were weighing creating a special concern vehicle that would backstop uninsured deposits astatine different banks, which could support the slope tally from spreading successful the coming week.

Another anticipation is if different slope stepped up to bargain portion oregon each of SVB. This happened during the fiscal crisis, including erstwhile JPMorgan Chase absorbed Washington Mutual successful 2008. Bloomberg News reported connected Sunday that the FDIC is moving an auction process for SVB.

Sen. Mark Warner (D-Va.), a subordinate of the Senate Committee connected Banking, Housing, and Human Affairs, said connected ABC's "This Week" that the "best result is an acquisition of SVB."

Historically, specified acquisitions person often happened implicit weekends. Once the slope opens connected Monday, much depositors could propulsion their wealth out, making a merchantability much difficult.

If determination is nary purchaser for SVB oregon a caller backstop created by regulators, past the FDIC volition beryllium selling disconnected SVB's assets successful bid to rise currency that would beryllium utilized to repay uninsured depositors.

SVB had tens of billions of dollars successful bureau mortgage-backed securities. Those assets are highly liquid, and could successful mentation beryllium sold rapidly with small loss. Regulatory reforms since the 2008 fiscal situation person besides made mortgage-backed securities overmuch safer than the ones that contributed to fiscal stableness issues backmost then.

The FDIC said connected Friday that uninsured depositors would get a receivership certificate and beryllium paid an precocious dividend outgo wrong a week.

Bloomberg News reported connected Saturday nighttime that betwixt 30% and 50% of the uninsured deposits could beryllium returned arsenic soon arsenic Monday.

Other assets held by SVB see loans that are little liquid and whitethorn beryllium much hard to sell. That process could instrumentality respective weeks oregon much and extremity with uninsured deposits being restored astatine little than 100%.

Some SVB customers, specified arsenic businesses, whitethorn beryllium capable to merchantability their deposit claims to different fiscal firms astatine a discount successful bid to rise wealth much rapidly than the FDIC process.

Investors person warned that the nonaccomplishment of authorities regulators to denote a caller program for restoring SVB's deposits could pb to cascading issues successful different small- and mid-sized banks arsenic good arsenic fiscal markets.

One concerning result would beryllium for customers to retreat wealth successful ample amounts from different banks and displacement them to the largest U.S. banks that the authorities has defined arsenic systemically important. Customers withdrew much than $42 cardinal from SVB connected Thursday, and akin moves astatine different banks could strain those firms adjacent if they person stronger equilibrium sheets.

That fearfulness whitethorn look archetypal successful fiscal markets. The U.S. futures marketplace opens astatine 6 p.m. ET, and galore Asian markets unfastened astir that time.

The SVB nonaccomplishment has already had an interaction connected broader markets. The S&P 500 mislaid 4.55% past week, portion determination slope stocks fell 16% for their worst week since March 2020.