It’s 1929 all over again as one of the nation’s largest banks, SVB Financial, shuts down.
A local police officer exited the bank’s 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.
But it wasn’t 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.
“All 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,” the Federal Deposit Insurance Corporation, the agency created to maintain stability and public confidence in the nation’s financial system, announced.
“Uninsured 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.”
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.
It’s 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 — dropping 60% in one day. For those in the crowds, it’s feeling like 1929 all over again as customers converge on the bank’s locations in a modern-day bank run.
“Least they could do is open the door, tell people what’s going on,” said John McPartland III of Ashland at around 11:20 a.m. At that time, he was among the “50 other people” outside the Wellesley location on Washington Street.
“This is a harbinger of what’s coming next, pal. We’re heading lower, probably toward a depression,” he added.
He called back maybe 10 minutes later, at around 11:30 a.m. Friday, to say that he had “given up” 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 “run out of money” and was only allowing wire transfers — which they told him were not going through.
SVB Bank’s parent company SVB Financial stock on Thursday plummeted 60% on Thursday, a figure the Wall Street Journal reported is “its biggest one-day wipeout in history.”
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.
“Right 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,” he told the Herald. “It reminds me of ‘A Wonderful Life.’ Let’s hope it doesn’t get to that.
McPartland said that he’s 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, “a very good bank,” he said, “they always treated me with respect.”
Boston Private was bought out by SVB — the Silicon Valley investment bank — 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.
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.
WELLESLEY, MA – March 10: Customers wait in line outside the Silicon Valley Bank just before the FDIC closed it on March 10, 2023 in Wellesley, Massachusetts (Staff Photo By Matt Stone/MediaNews Group/Boston Herald)
WELLESLEY, MA – March 10: Dennis Staires, a representative from Silicon Valley Bank explains to customers that the FDIC closed the bank on March 10, 2023 in Wellesley, Massachusetts (Staff Photo By Matt Stone/MediaNews Group/Boston Herald)
WELLESLEY, MA – March 10: John McPartland III, a Silicone Valley Bank customer stands in line at the bank just before FDIC closed SLB on March 10, 2023 in Wellesley, Massachusetts (Staff Photo By Matt Stone/MediaNews Group/Boston Herald)
WELLESLEY, MA – March 10: Customers wait in line outside the Silicone Valley Bank just before the FDIC closed it on March 10, 2023 in Wellesley, Massachusetts (Staff Photo By Matt Stone/MediaNews Group/Boston Herald)
WELLESLEY, MA – March 10: A Wellesley police officer tells customers that the FDIC has closed the Silicone Valley Bank on March 10, 2023 in Wellesley, Massachusetts (Staff Photo By Matt Stone/MediaNews Group/Boston Herald)