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bankingMarch 13, 2023

Musk says he's open to buying Silicon Valley Bank

San Francisco: Twitter CEO Elon Musk said he is open to buying the bankrupt lender -- Silicon Valley Bank (SVB) -- and turning it into a digital bank.

His tweet came after the California Department of Financial Protection and Innovation shut down SVB on Friday, less than two days after the bank tried to persuade clients not to pull their money over concerns it was running low on available cash. On Friday, Min-Liang Tan, Co-founder and Chief Executive Officer of Razer, tweeted 'I think Twitter should buy SVB and become a digital bank.'
'I'm open to the idea,' Musk tweeted in response.

On March 10, US regulators shut the bank down and its assets were seized. The Silicon Valley Bank is one of the most prominent lenders in the US and specialises in financing startups and had become the 16th largest US bank by assets at the end of 2022.

It had $209 billion in assets and approximately $175.4 billion in deposits.
Since Musk had spoken of creating a payments platform on Twitter and with the development of his tweets on the lender, there are speculations that he might be really interested in SVB.

Silicon Valley Bank's failure came two days after its emergency moves to handle withdrawal requests and a precipitous decline in the value of its investment holdings shocked Wall Street and depositors, sending its stock careening. The bank, which had USD 209 billion in assets at the end of 2022, had been working with financial advisers until Friday morning to find a buyer, a person with knowledge of the negotiations told The New York Times on Friday.

While the woes facing Silicon Valley Bank are unique to it, a financial contagion appeared to spread through parts of the banking sector, prompting US Treasury Secretary Janet Yellen to publicly reassure investors that the banking system was resilient.