FDIC Accidentally Releases Bailout List

In response to a Bloomberg News Freedom of Information Act request, the Federal Deposit Insurance Corp. (FDIC) stated that the agency accidentally released an unredacted bailout list.

Silicon Valley Bank headquarters in Santa Clara, California

When federal regulators stepped in to backstop all of Silicon Valley Bank’s deposits, they saved thousands of small tech startups and prevented what could have been a catastrophic blow to a sector that relied heavily on the lender.

But the decision to guarantee all accounts above the $250,000 federal deposit insurance limit also helped bigger companies that were in no real danger. Sequoia Capital, the world’s most prominent venture-capital firm, got covered the $1 billion it had with the lender. Kanzhun Ltd., a Beijing-based tech company that runs mobile recruiting app Boss Zhipin, received a backstop for more than $900 million. 

A document from the Federal Deposit Insurance Corp., which the agency said it mistakenly released unredacted in response to a Bloomberg News Freedom of Information Act request, provides one of the most detailed glimpses yet into the bank’s big customers.

The FDIC, which has been selling off pieces of the bank since its failure, asked that Bloomberg destroy and not share the depositor list, saying the agency intended to “partially” withhold some details from the document “because it included confidential commercial or financial information,” according to a letter from an attorney for the regulator. The agency subsequently declined to comment on the substance of the information in the document.

US regulators’ decision to declare a “systemic risk exception” and make all depositors at Silicon Valley Bank whole came after a white-knuckled weekend as tech founders digested SVB’s collapse on Friday, March 10. President Joe Biden described the solution as one that “protects American workers and small businesses, and keeps our financial system safe.” 

According to UPI News, gold bar vending machines have been rolled out at South Korean convenience store GS Retail.

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