It\u2019s 1929 all over again as one of the nation\u2019s largest banks, SVB Financial, shuts down.<\/p>\n
A local police officer exited the bank\u2019s branch in Wellesley at around 11:35 a.m. today to announce to the throng of people desperate to access their savings that the FDIC had closed the bank.<\/p>\n
But it wasn\u2019t just in Massachusetts, it was nationwide as the FDIC announced Friday morning that it had closed all 17 Silicon Valley Bank locations in California and Massachusetts.<\/p>\n
\u201cAll insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week,\u201d the Federal Deposit Insurance Corporation, the agency created to maintain stability and public confidence in the nation\u2019s financial system, announced.<\/p>\n
\u201cUninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.\u201d<\/p>\n
The Wellesley branch crowd was angry but more confused. They asked for a Silicon Valley Bank representative to confirm the news, and so bank representative Dennis Staires came out and did so. Could they at least access their safety deposit boxes, someone asked? No, Staires told them; the bank was closed.<\/p>\n
It\u2019s a scene playing out in towns across the country as the Silicon Valley-based bank melts down following a Thursday where its stock fell off the cliff \u2014 dropping 60% in one day. For those in the crowds, it\u2019s feeling like 1929 all over again as customers converge on the bank\u2019s locations in a modern-day bank run.<\/p>\n
\u201cLeast they could do is open the door, tell people what\u2019s going on,\u201d said John McPartland III of Ashland at around 11:20 a.m. At that time, he was among the \u201c50 other people\u201d outside the Wellesley location on Washington Street.<\/p>\n
\u201cThis is a harbinger of what\u2019s coming next, pal. We\u2019re heading lower, probably toward a depression,\u201d he added.<\/p>\n
He called back maybe 10 minutes later, at around 11:30 a.m. Friday, to say that he had \u201cgiven up\u201d and that the one or two people the bank had been letting in at the time had come out despondent and telling him that the bank had \u201crun out of money\u201d and was only allowing wire transfers \u2014 which they told him were not going through.<\/p>\n
SVB Bank\u2019s parent company SVB Financial stock on Thursday plummeted 60% on Thursday, a figure the Wall Street Journal reported is \u201cits biggest one-day wipeout in history.\u201d<\/p>\n
That WSJ story is what sent a Wellesley resident named Peter, who preferred not to share his last name, a 41-year business owner, straight out to the Wellesley branch to take out at least some of the cash in his business account to keep cash flowing for his business and to pay his employees.<\/p>\n
\u201cRight now there are a couple people who have told me that tried to do a wire transfer that was canceled and denied by the bank,\u201d he told the Herald. \u201cIt reminds me of \u2018A Wonderful Life.\u2019 Let\u2019s hope it doesn\u2019t get to that.<\/p>\n
McPartland said that he\u2019s been with the bank for more than 20 years, or at least what the bank was. He had started his account when the bank was the forerunner to what became Boston Private, \u201ca very good bank,\u201d he said, \u201cthey always treated me with respect.\u201d<\/p>\n
Boston Private was bought out by SVB \u2014 the Silicon Valley investment bank \u2014 in June of 2021. The larger bank seemed like a safe option and people in line including McPartland and Peter told the Herald they had no fear.<\/p>\n
Peter said his only banking fear in his 68 years came during the 2008 Great Recession, when economic activity beginning in 2007 slid to its lowest point since the Great Depression hit in 1929.<\/p>\n
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