SVB's German Branch Ordered to Halt Transactions by Regulator

By Ed Frankl

Germany's financial regulator, Bafin, on Monday issued a moratorium prohibiting the German arm of Silicon Valley Bank from sales and payments due to the danger it won't fulfill its obligations toward creditors.

Bafin said it also ordered the bank to close customer transactions for the German business, called Silicon Valley Bank Germany Branch, to secure the bank's assets in an orderly process.

However, the German branch doesn't pose a threat to financial stability and has "no systemic relevance," it said.

Santa Clara, Calif.-based SVB was placed under the control of the U.S. Federal Deposit Insurance Corp. on Friday, after a bank run scuttled the lender's plans to raise fresh capital.

Banking stocks in Europe are down sharply on Monday, with Deutsche Bank AG down 6.7% and Commerzbank falling 12% at 1040 GMT.

Bafin's measures are in effect until further developments are clarified with the branch's parent company at the FDIC, it said.

The German branch, based in Frankfurt, had total assets of 789.2 million ($839.8 million) at the end of 2022, according to Bafin.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

March 13, 2023 07:08 ET (11:08 GMT)

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