March 14, 2023

FDIC: New FIL Clairifies Financial Institutions are Required to Meet Contractual Obligations with Bridge Banks

In recent days, the FDIC has established two bridge banks, Silicon Valley Bridge Bank, N.A. and Signature Bridge Bank, N.A., to assume the deposits and obligations of two failing banks. All contracts entered into with banks before they failed, and their counterparties were transferred into the bridge bank by the FDIC as receiver. Accordingly, vendors and counterparties with contracts with the bridge bank are legally obligated to continue to perform under the contracts, and the bridge is obligated to and has the full ability to make timely payments to vendors and counterparties and otherwise perform its obligations under the contract.

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-insured financial institutions.


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