The dust had barely settled after Silicon Valley Bank’s collapse last year when savvy investors began lining up for a big payout, based on a hastily written government press release.
Now, in the ensuing legal fight, the Federal Deposit Insurance Corp. is nearing a high-stakes court ruling that could force the regulator to describe how it crafted an announcement that left it exposed to paying $2 billion from its main insurance fund. The money would go to the failed bank’s bankrupt parent and onward to creditors, at the expense of other big US banks.
