Silicon Valley Bank signed exclusive banking deals with some clients, leaving them unable to diversify
Publishing timestamp: 2023-03-12 21:56:20
Summary
Silicon Valley Bank required some clients to agree to exclusivity clauses, which limited their ability to use banking services from other institutions. This has become problematic after the bank's seizure by federal regulators, leaving its customer base fearful that millions of dollars in operating funds would be locked up for an indefinite period of time. The article reviews six agreements that companies signed with SVB regarding financing or credit solutions, all of which required companies to open or maintain bank accounts with SVB and use the firm for all or most of their banking services. The article highlights how SVB's exclusivity clauses have limited its clients' ability to diversify their banking services, which has become problematic after the bank's seizure by federal regulators.
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