The US government’s financial regulator, the Federal Deposit Insurance Corporation (FDIC), took over Silicon Valley Bank on March 10 and Signature Bank on March 12. The FDIC has asked banks interested in acquiring the two banks to bid by March 17, citing sources familiar with the matter, Reuters reported.
The FDIC tried unsuccessfully to sell SVB on Sunday, its second such attempt.
The sources said the FDIC hired Piper Sandler Companies to conduct a new round of auctions with the goal of selling the two banks as a package, or considering bids to acquire portions of the two banks’ businesses if they fail to meet the criteria. Also, only bidders with existing banking licenses will be able to research the bank’s financials before submitting an offer, a move aimed at giving traditional lenders an edge over private equity firms. The FDIC declined to comment on the news.
U.S. Republican Senator Marco Rubio wrote a letter to Treasury Secretary Janet Yellen urging the Treasury Department to prioritize U.S. national security, especially geoeconomic competition with China. Rubio said the Treasury Department should ensure the assets of the two banks do not fall into the hands of hostile buyers in China, including Hong Kong and Macau. He asked the Committee on Foreign Investment in the United States (CFIUS) to carefully review to ensure that promising American companies engaged in key technologies will not eventually be acquired by Chinese conglomerates and other companies.
Founded in 1982 in San Jose, California, Silicon Valley Bank specializes in financing technology and start-ups. Entered Beijing, China in 2005. In November 2012, Shanghai Pudong Development Bank and Shanghai Pudong Development Bank each invested 50% in Shanghai to establish the first Sino-US joint venture bank – SPD Silicon Valley Bank. This is the first joint venture bank in China that is not led by the Chinese party and has an independent legal person status. In July 2015, it was approved by the China Banking and Insurance Regulatory Commission to start RMB business.
According to the company’s database Tianyancha, Silicon Valley Bank Financial Group, the parent company of Silicon Valley Bank, also has venture capital management and science and technology business consulting companies in Beijing and Shanghai, and invested in the establishment of a loan guarantee company in Hangzhou.
Lu Guozhen, chief editor of Taiwan’s “Business Weekly”, said in the “Critical Moment” program that Silicon Valley Bank is the umbilical chain linking American technology and capital with China. Many Chinese companies rely on this company to obtain American capital and technology. After Shanghai Pudong Development Bank cooperated with it, it supported more Chinese technology companies and start-up companies to realize the CCP’s dream of overtaking the United States in technology. Thousands or even as many as 3,000 startups in China are related to Silicon Valley Bank.
The “Financial Times” also quoted people in the industry as saying that Silicon Valley Bank is an important link in the capital chain between the United States and China. American venture capital companies usually deposit funds in Silicon Valley Bank before sending funds to China.
Lu Guozhen pointed out that the next thing China is worried about is whether it will expose all the capital chain and technology chain to the United States because of this incident. Under the situation of technological confrontation between the United States and China, whether the United States will cut its umbilical cord in response to this matter is also a matter of concern to everyone.
Veteran political and economic commentator Wu Jialong said in an interview with Voice of Hope that the collapse of Silicon Valley Bank is equivalent to the closure of the channel for Chinese mainland startups to come to the United States for financing. part of the financial decoupling between China and China”.
He further explained that there are four aspects to the entire financial decoupling between the United States and China. The first is that Chinese companies listed in the United States are required to provide audited financial statements to meet regulatory requirements. If they fail to do so, Chinese companies will be delisted. This is because the U.S. capital market no longer provides funds to Chinese companies; the second example is that U.S. pension funds and pension funds no longer go to China to find investment targets, and Hong Kong may also consider it; the third is that there are many American funds in Hong Kong. These funds may also be withdrawn from Hong Kong; the fourth is that Silicon Valley Bank is no longer used as a financing channel for Chinese start-ups.
Liao Jinzhang, chairman of Taiwanese businessman, also said in the “News Breaking” program that the collapse of Silicon Valley Bank is a series of economic decoupling practices. He said, “This is also because the Chinese economy itself has experienced many problems and has become very fragile. So when people beat you, they must start from this point. Americans never make a false attack when they do things, and they punch to the flesh, and every action is done thoroughly. All the unclean and unclear things of the CCP, This time, they may all be brought out one by one”, “What will happen in the future, this may be a game between the two countries”.
Wu Jialong also pointed out that many corrupt CCP officials laundered corrupt money in the name of start-ups, so Silicon Valley Bank is not only a channel for Chinese start-ups to finance, but also a channel for CCP corrupt officials and rich people to launder money.