The Federal Deposit Insurance coverage Company (FDIC) has named former Fannie Mae CEO and Mix president Tim Mayopoulos as CEO of Silicon Valley Financial institution N.A., an FDIC-operated “bridge financial institution” meant to guard all depositors of the now shut-down Silicon Valley Financial institution (SVB).
Whereas the FDIC — an unbiased authorities company that insures financial institution deposits and abroad monetary establishments — declined to touch upon Mayopoulos’ position, his profession has been centered on monetary and authorized experience.
Mayopoulos has been a member of the FDIC systemic decision advisory committee for greater than two years and has been a board member at monetary companies agency LendingClub — the biggest on-line market lender — since 2016. LendingClub’s mission is to remodel the banking system.
After spending about 20 years as a banking lawyer, Mayopoulos joined Fannie Mae in 2009 as common counsel and company secretary of the government-sponsored enterprise — shortly after it was taken over by the federal authorities on the top of the monetary disaster.
After being promoted to CEO in 2012, Mayopoulos returned Fannie Mae to profitability, delivering greater than $167 billion in dividends to the U.S. Treasury and introducing new applied sciences to the housing finance system.
Mayopoulos resigned from Fannie Mae in 2018 and joined mortgage software program startup Mix the next 12 months, changing into one of many highest-profile executives to affix the fintech trade.
Santa Clara-based SVB collapsed Friday morning after it encountered a basic run on the financial institution. The financial institution failed to boost capital to plug a $1.8 billion loss from the sale of a $21 billion portfolio of available-for-sale securities that triggered huge deposit outflows.
California regulators intervened, shutting the financial institution down and inserting it in receivership beneath the FDIC.
The FDIC transferred all deposits, each insured and uninsured, and different belongings of the previous SVB, to a newly-created, full-service FDIC-operated “bridge financial institution” — a choice designed to guard all depositors of SVB, in keeping with the federal government company on Monday.
A bridge financial institution is a chartered nationwide financial institution that operates beneath a board that’s appointed by the FDIC. The bridge financial institution assumes the deposits and different liabilities, and likewise purchases sure belongings of a failed financial institution. The bridge financial institution construction is designed to “bridge” the hole between the failure of a financial institution and the time when the FDIC can stabilize the establishment and implement an orderly decision.
Based in 1983, SVB specialised in banking for tech startups, offering financing for nearly half of U.S. venture-backed expertise and healthcare corporations. Previous to the shut-down, the financial institution was among the many 20 largest business banks in America, with $209 billion in complete belongings on the finish of 2022, in keeping with the FDIC.