Date:
March 13, 2023
Silicon Valley Bank's depositors to be fully protected by Federal Reserve, according to a joint statement released by Janet Yellen, Jerome H. Powell, and Martin J. Gruenberg.
The Federal Reserve has issued a statement confirming that depositors of Silicon Valley Bank will be fully protected, both insured and uninsured.
As the most prominent figures in the tech world, Sam Altman and Vinod Khosla, are offering personal capital to startups on the collapse following the SVB's closure.
This means that depositors will have access to all of their money starting Monday, March 13th, without any losses associated with the resolution of the bank being borne by taxpayers.
Nearly half of US venture capital-backed startups have been affected by this issue, and people can't easily move money or have liquid cash due to it being the weekend. Altman confirmed he is using a "decent amount" of personal capital, and the loans are to help startups that "need to make payroll now."
Similarly, Khosla is offering personal loans at borrowing cost to companies in the Khosla Ventures portfolio. General Catalyst, Kleiner Perkins, Ribbit Capital, Upfront, and more offer loans to startups at a very low-interest rate.
But, it's inspiring to see the tech world come together to support each other. However, there are legal complications, and a need for a lending license is required.
