Last week saw the FDIC step in to close the Silicon Valley Bank (SVB), the financial institution of choice for California’s wine industry. Now the federal government has announced a multi-billion dollar rescue package for the bank's depositors.
In a joint statement released by the Treasury, Federal Reserve, and FDIC, regulators announced that they would safeguard all of the bank's deposits, including funds not typically covered by federal deposit insurance. The move will allow depositors to access accounts that were locked over the weekend and help California wineries avoid a severe financial crisis.
The rescue package aims to prevent SVB’s abrupt collapse from inciting a domino effect on the U.S. financial system. While winemakers will breathe a sigh of relief after avoiding an immediate crisis, the closure of SVB is still expected to have long-term implications for California’s wine trade. [Decanter]
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