Canadian authorities have taken permanent control of the assets of the only branch of Silicon Valley Bank or SVB in the country.
That branch is in Toronto. In a statement issued on Wednesday, the Office of the Superintendent of Financial Institutions or OSFI announced the measure, after taking temporary control of the Santa Clara bank, a bank located in California on Sunday, because the crisis over its failure in the United States is open.
OSFI also said the Ontario Superior Court of Justice granted a winding-up order in respect of the institution.
The OSFI statement said that it will begin “an orderly, court-ordered process to restructure the department as a result of the newly created, full-service US Federal Deposit Insurance Corporation or FDIC ‘bridge bank’, Silicon Valley Bridge Bank, NA,” in This approach best serves the interests of its borrowers and will allow Silicon Valley Bank’s operations to continue in Canada.”
“The process is intended to facilitate the smooth transition of the Canadian branch of Silicon Valley Bank to FDIC Bridge Bank,” he added.
“I took this action to effect the orderly transition of the Canadian branch of Silicon Valley Bank to an FDIC bridge bank. I am satisfied that this approach, developed with government officials in the United States, is in the best interest of the lenders of the sector,” Peter Routledge, head of OSFI and Supervisor of Financial Institutions, said.
The consultancy, PriceWaterhouseCoopers Inc has been appointed by the court to oversee the transition.
The statement indicates that SVB’s Canadian business is “focused primarily on lending to corporate clients, and as such does not hold any commercial or individual deposits.”
SVB has been operating in Toronto as a foreign bank branch since February 2019.
Amidst fears of a banking crisis in the US following the failure of the SVB to spread to Canada, Deputy Prime Minister and Finance Minister Chrystia Freeland issued a statement late Tuesday evening stressing that Canada’s “institu- financial performance is stable and resilient.”
Leave a Reply