The Office of the Superintendent of Financial Institutions has temporarily seized the assets of the Canadian branch of Silicon Valley Bank (SVB), in order to preserve their value.
US banking regulators were forced to urgently shut down the California institution on Friday after billions of dollars were withdrawn by worried depositors.
In a statement, the Canadian regulator says the bank operates in the country as a branch of a Toronto-based foreign bank, which it oversees.
He notes that SVB’s activity in Canada consists mainly of lending to businesses and that the branch does not hold any commercial or individual deposits in Canada.
Superintendent Peter Routledge has also indicated his intention to seek permanent control of the assets of the Canadian branch and is asking the Attorney General of Canada to issue a winding-up order.
Mr. Routledge explained that by taking temporary control, OSFI is acting to protect the rights and interests of the branch’s creditors.
He points out that the Canadian branch of Silicon Valley Bank does not receive deposits from Canadians and that this situation results from circumstances specific to Silicon Valley Bank in the United States.
Silicon Valley Bank primarily served tech workers and venture-backed companies, including some of the industry’s best-known brands.
It is the second largest bank failure in US history after Washington Mutual in 2008.
The Canadian regulator says it has closely monitored the Canadian branch of Silicon Valley Bank since the bank’s troubles began. It further states that, in accordance with internationally accepted Basel III international standards, it “continues to exercise diligent oversight of federally regulated banks in Canada, including stringent capital adequacy requirements and cash”.