Some Silicon Valley bank depositors seek to sell deposits at a discount

On March 12, according to the Financial Times, some depositors of Silicon Valley banks are trying to sell their deposits at a large discount to raise cash. According to the data of Cherokee Acquisition, the quotation of bank deposits in Silicon Valley that are not covered by insurance is between 55% and 65% on the 10th. According to the report, for some start-ups, it is their last resort to sell their deposits at a discount in order to pay their employees’ wages. A number of VCs said that they had contacted some start-ups and hoped to buy their deposits at a certain discount. Data shows that by the end of 2022, 96% of deposits in Silicon Valley banks were not covered by the Federal Deposit Insurance Corporation (FDIC). (CCTV Finance)

Interpretation of this information:

The Financial Times reported on March 12 that depositors of Silicon Valley banks are selling their deposits at a large discount in order to raise cash. This is because the deposits are not covered by insurance and therefore represent a higher risk for the depositor. Quotations of bank deposits in Silicon Valley not covered by insurance are currently between 55% and 65%. Some startups are resorting to selling their deposits at a discount in order to pay their employees’ wages. Venture capitalists are also buying these deposits at a certain discount as a way to invest in startups. It is important to note that 96% of deposits in Silicon Valley banks were not covered by the Federal Deposit Insurance Corporation as of the end of 2022.