The largest U.S. banks didn’t submit a bid for Silicon Valley Bank over the weekend, largely because they were initially excluded from the sales pro

Why the biggest banks were first shut out of bidding on Silicon Valley Bank

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2023-03-16 18:00:06

The largest U.S. banks didn’t submit a bid for Silicon Valley Bank over the weekend, largely because they were initially excluded from the sales process by the Federal Deposit Insurance Corp. and ran out of time as a result, people familiar with the matter said.

The agency, which is led by FDIC Chair Martin Gruenberg, who has been publicly critical of consolidation in the industry, eventually allowed the biggest global banks into the auction where potential bidders didn’t get access to SVB’s financial information until late into the weekend, when the data room was opened, the people said.

Bids were due Sunday afternoon — too late to ensure a deal could be announced before the market opened on Monday. The four largest U.S. lenders — JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo — are already big enough that they would need a regulatory waiver to buy another deposit-taking bank.

After rejecting at least one bid, the FDIC is now renewing efforts to find a buyer for SVB, taking a second stab at a process that has rattled the financial system and been criticized as muddled and politicized the longer it has gone on.