Canada's Banking Regulator Takes Permanent Control of SVB's Canadian Assets

Canada's Office of the Superintendent of Financial Institutions (OSFI), an independent agency responsible for regulating the country's banking system, said on Wednesday (March 15) that it had took additional action to protect creditors of the Silicon Valley Bank (SVB)'s Canadian branch by taking permanent control of its assets. Meanwhile, the Ontario Superior Court of Justice granted a winding up order in respect of the institution.

The Canadian regulator stated in the announcement: "The winding up order under section 10.1 of the Winding-up and Restructuring Act begins an orderly, court-supervised process to restructure the branch as a result of the newly created, full-service U.S. Federal Deposit Insurance Corporation (FDIC) 'bridge bank' – Silicon Valley Bridge Bank, N.A. – in a way that best serves the interests of its creditors and will allow operations of the Silicon Valley Bank to continue in Canada."

It further explained: "The process is intended to facilitate an orderly transition of the Canadian branch of Silicon Valley Bank to the FDIC Bridge Bank. PriceWaterhouseCoopers Inc. has been appointed by the court to oversee the transition. As the court order has been granted, OSFI no longer has an active role in the resolution of this matter."

Last Sunday (March 12), the Superintendent took temporary control of the assets held by Silicon Valley Bank's Canadian branch in Toronto after the California Department of Financial Protection and Innovation shut down the bank, which is headquartered in Santa Clara, California, and appointed the FDIC as its receiver.

Financial regulators in major countries around the world, such as the Federal Reserve​ and Germany's Bafin​, have taken measures to curb a series of adverse effects brought about by the collapse of SVB. Fazzaco has mapped out the timeline of the banking crisis​.