FHLBank: Silvergate hasn’t stopped lending

The Federal Home Loan Bank of San Francisco (FHLBank) provided $4.3 billion to Silvergate late last year and did not force Silvergate to repay the advance, which is rumored to be the reason why the crypto-friendly bank went into voluntary liquidation. A spokesman for the bank said, “FHLBank San Francisco did not require or coerce Silvergate Bank to prepay its outstanding advance payment, and Silvergate decided to prepay the outstanding advance payment based on its own assessment of its own situation.” Silvergate Capital in March It had to speed up securities sales to raise funds to repay a San Francisco Federal Home Loan Bank advance, it disclosed in a securities filing on Monday. Silvergate Bank fully repaid the loans by earlier this month. Some in the crypto industry speculate that this ultimately sparked a bank run on Silvergate. Silvergate’s share price plummeted the day after the disclosure, and days later it announced it was suspending operations and going into voluntary liquidation. The spokeswoman said FHLBank could call for early repayments if there were a “material adverse change” in the banks it borrowed from, but that did not happen with Silvergate.

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