Consequences for customer deposits in the event of US bank insolvencies

On Friday, March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection & Innovation and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver.According to Bloomberg, the FIDC has already begun an auction for SVB.The central question now is: What happens to the customer money? according to FDIC data, there have been 561 bank failures in the USA since 2001. Using a machine text analysis, it can be calculated from the descriptions that in 496 bank failures (88%) all customer funds were preserved. In the remaining 65 (12%), at least the legally secured deposits were repaid. The last US bank failure of this magnitude was Washington Mutual on September 26, 2008. At that time, the bank was taken over by JPMorgan Chase and all customer deposits were repaid.