THE DEPARTMENT OF Finance is “monitoring developments regarding the collapse of Silicon Valley Bank”.
A huge run on deposits left the medium-sized bank unable to stay afloat on its own.
It had been a key lender to startups across the United States since the 1980s
US President Joe Biden has vowed to hold “fully accountable” the people responsible for “this mess” after regulators took control of SVB on Friday.
Elsewhere, the UK arm of Silicon Valley Bank has been sold to HSBC for a nominal £1 (€1.13) in a rescue deal, the UK government and HSBC announced today.
While the Department of Finance said there is “limited direct impact on the Irish financial system”, a statement from the Department notes that “Silicon Valley Bank was a lender to some Irish companies since 2012”.
The statement added: “The Department will monitor the progress of the Federal Deposit Insurance Corporation (FDIC), the US Government agency that guarantees bank deposits, in its sale of SVB and what impact that may have on domestic companies impacted by this failure.”
The FDIC guarantees deposits – but only up to $250,000 (€234,000)per client and per bank.
On Saturday, the Ireland Strategic Investment Fund (ISIF) said the around $100m it had invested in five funds managed by SVB Capital, a subsidiary of the Silicon Valley Bank (SVB) Financial Group, would not be impacted.
“ISIF does not expect any impact on these investments arising from SVB Financial Group’s announcement that it will issue additional shares in the group,” a spokesperson for ISIF told RTÉ.
A statement from ISIF added: “The distributions received by ISIF from these investments since 2012 exceed the amount currently invested.
“ISIF has structured these investments in a manner that legally ring-fences them from the rest of the SVB Financial Group.”
Irish tech entrepreneur Pat Phelan, co-founder and CEO of Sisu Clinic, told RTÉ yesterday that he pulled money out of SVB on Thursday night.
However, Phelan said he had been getting calls from people in Irish companies that left money in the now collapsed bank.
“I was talking to one person in particular, who runs a very successful Irish company, and has $8 million that they have no access to today,” he told RTÉ’s This Week programme.
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