US authorities intend to sell Silicon Valley Bank and Signature Bank securities

The US Federal Deposit Insurance Corporation (FDIC) intends to sell securities portfolios abandoned by the new owners of bankrupt Silicon Valley Bank and Signature Bank.

FDIC representatives clarify that the portfolios consist of low-yielding assets, such as treasury bonds and securities issued by US government agencies, which these banks accumulated while interest rates were close to zero.

And if First Citizens Bancshares (the new owner of Silicon Valley Bank) or New York Community Bancorp (who bought Signature Bank) took over these assets, they would have to suffer losses, because interest rates are now much higher than the profitability of these assets.

It is also noted that the portfolios of Silicon Valley Bank and Signature Bank have a nominal value of about $90 billion and $26 billion dollars, respectively.

Recall that on March 10, California regulators closed Silicon Valley Bank, one of the twenty largest commercial banks in the United States, which was the main asset of SVB Financial Group (the group itself declared bankruptcy on March 17). This event was the largest bank failure in the United States since the financial crisis in 2008. The collapse of the SVB is associated with an increase in the Fed's key rate, which led to the depreciation of assets on the balance sheets of many financial institutions.

In addition, on March 8, the closure of the crypto-oriented Silvergate bank was announced, and on March 12, the similar New York Signature Bank.