News from Cda - regulator takes control of SVB Canada u it Market Chatter: Regulator Took Control of SVB's Canada Unit, Seeking Windup
06:30 AM EDT, 03/13/2023 (MT Newswires) -- Canada's banking regulator seized control of SVB Financial Group's branch in the country Sunday and said it will seek a legal order to wind up the operation, Bloomberg News reported overnight Sunday.
Peter Routledge, the country's financial superintendent, "took this action to preserve the value of the assets held at the branch" after US regulators shut down the California-based parent bank on Friday, his office said in a statement.
Canada's Finance Minister Chrystia Freeland spoke with banking executives and Bank of Canada officials on Sunday evening, and said the government continues to watch the situation. "Canada's well-regulated banking system is sound and resilient," she said via Twitter.
SVB received a license to open a foreign bank office in Toronto in 2019. It doesn't take commercial or retail deposits, and it's a small part of the bank. The branch ended last year with C$864 million ($627 million) in assets, including C$435 million in secured loans, according to regulatory filings.
"By taking temporary control of the Canadian branch of Silicon Valley Bank, we are acting to protect the rights and interests of the branch's creditors," Routledge said in a statement. "I want to be clear: the Silicon Valley Bank branch in Canada does not take deposits from Canadians, and this situation is the result of circumstances particular to Silicon Valley Bank in the United States."
The Council of Canadian Innovators, an industry group, has been reaching out to firms and investors since since SVB failed on Friday, President Benjamin Bergen said in an interview.
"Currently, the exposure does not appear to be that high for Canadian firms," Bergan said by phone. "It doesn't seem to be the same kind of systemic issue that you're going to see in Silicon Valley." But there were a few companies that seemed to be struggling to figure out next steps, he said, as cash was stuck at the now-insolvent bank.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)