Banking regulator takes permanent control of Silicon Valley Bank's Canadian assets

The Superintendent of Financial Institutions took additional action to protect creditors of the Silicon Valley Bank (SVB)Canadian branch by taking permanent control of its assets, a statement said on Wednesday.

The statement from the Office of the Superintendent of Financial Institutions Canadaalso said the Ontario Superior Court of Justicehad granteda winding-up order that would begin "an orderly, court-supervised process" to restructure the Canadian branch, following the creation of the Silicon Valley Bridge Bank.

These actions had been expected afterSuperintendent of Financial Institutions Peter Routledge previouslytooktemporary control of the assets held by SVB'sCanadian branch after U.S. regulatorsshut down the Santa Clara, Calif.,-based bank last week.

"I took this action to affect an orderly transition of the Canadian branch of Silicon Valley Bank to the FDIC bridge bank," Routledge said in the statement issued Wednesday.

"I am satisfied that this approach, developed with officials in the United States, is in the best interest of the branch's creditors."

The SVB collapse was the second-biggest bank failure in U.S. history.The U.S. Federal Reserve Board has announced a review ofthe supervision of the bank "in light of its failure."

Justice, SEC investigations

The Associated Press reported on Wednesdaythat the U.S. Department of Justice and the U.S. Securities and Exchange Commission have launched separate investigations into SVB's demise.

There are also demands from politicians to investigate what went wrong.

U.S. Sen.John Thune, the second-ranking Republican in the Senate,said most Republican members want answers from regulators as to why they were "asleep at the switch" over the collapse of Silicon Valley Bank.

U.S. regulators also shut down the New York-based Signature Bank in recent days, which was the third-largest U.S. bank failure.

In the wake of the bank failures, U.S. officials have taken steps to protect affected SVB and Signature depositors and to assure the public of the safety of the U.S. banking system.

YetSVB's demise, followed by that of Signature Bank two days later, sent global bank stocks on a roller-coaster ride this week, with investors discounting assurances from U.S. President Joe Biden and emergency steps giving banks access to more funding.

By Wednesday, focus had shifted from the United States to Europe, where Credit Suisse led a rout in bank shares after its largest investor said it could not provide more financial assistance because of regulatory constraints.

Hoping to quell concerns, Swiss financial regulatorFINMA and the Swiss central bank said there were no indications of a direct risk of contagion for Swiss institutions from U.S. banking market turmoil.