RALEIGH, N.C. -- Some Triangle investors are breathing a sigh of relief after federal regulators took control of Silicon Valley Bank (SVB) over the weekend following its collapse.
SVB's failure is the second-biggest bank failure in U.S. history. Monday, President Biden addressed the collapse to ease concerns about the nation's banking system.
The Federal Reserve, Treasury, and F.D.I.C. have taken over SVB and are now guaranteeing all SVB depositors will have full access to their FDIC-insured money.
Treasury Secretary Janet Yellen asserts that the regulator's actions do not amount to a bailout, but, that funds would come from an FDIC account that U.S banks pay into.
The move is a big relief to Durham-based Venture Capitalist, Dave Kirkpatrick who is Managing Director and co-founder of SJF Ventures.
"We have 10 companies out of about 50 companies we've invested in across the country that bank with Silicon Valley Bank, and for many of them, it was their only account," Kirkpatrick said.
"I was on the phone with several of our portfolio company CFOs yesterday afternoon, trying to figure out how they were going to make payroll next week," he said. "So, this is a relief. It's not over yet, because they have to open new bank accounts, move the funds over, start receiving new customer payments at the new account. So, it's complicated and disrupted."
"But, federal action was very much needed. Despite the name Silicon Valley Bank, there were really tens of thousands of companies that had accounts with them across the country, and this was about really small and entrepreneurial businesses, and helping them to meet payroll and continue operations this week."
Biden said in his address he wants those responsible for the collapse to be held accountable and called for better oversight and regulation of larger banks.