Update from the FDIC over the weekend: all the deposits will be made available to SVB depositors on Monday. The risk would be bornborne by the FDIC which will make a special assessment on its members if additional funds are needed. I.e.: the banks will pay for this out of their own pocket (which will be filled back from customers' fees and interest charges, obviously). The shareholders and bondholders of the bank are wiped out, and according to the statement all the senior management will be "removed" (fired? Jailed? We'll have to wait and see).
The US government seems to also set up a new fund to help banks bridge short term liquidity events like the one that toppled SVB. Given that over the weekend another bank collapsed, it may be quite timely.
The FDIC will make the money for insured depositors (up to $250K per depositor) available on Monday. For the rest there's going to be an advance dividend payment and the rest will be distributed as the FDIC liquidates the bank's assets. See the FDIC press release for details.
Some details from the comments:
- FDIC insures up to $250K per depositor per institution. It's that insured part that will be available on Monday (the bank was taken over by the FDIC on Friday before start of business and was closed on Friday).
- Most SVB depositors are companies and about 95% of the deposits are not insured by the FDIC, and those will have to wait until the liquidation unfolds.
Historically, when FDIC takes over failed banks, depositors were eventually made whole in almost all cases. However this is a process that takes time. In the other answer the case of Washington Mutual (WaMu) was mentioned - but it is not similar. WaMu's failure was anticipated for weeks, and both WaMu and FDIC were working on potential acquisition. FDIC took over the bank once its acquisition plan by Chase has been finalized, and turned the bank over to Chase immediately. There were no losses to depositors (Chase assumed all deposit liabilities) and in fact that transition was seamless.
The SVB case is different. It failed due to a bank run which was caused by a couple of actions and decisions of the SVB itself, all happening within just a couple of days. There's no prepared and finalized liquidation plan, no buyers already lined up, and in this case the FDIC is planning, at list for now, to do what it was set up to do: take care of the insured depositors first, deal with the rest later.
The main issue that may cause problems for individuals here is the ripple effect. The companies they work at or depend on for payments may in turn depend on SVB for their own cashflow and the fact that the deposits are tied up in the FDIC process may cause ripple effects and liquidity struggles for the affected SVB customer companies. For most parts this should be mitigated by the affected companies themselves through either bridge loans or selling their deposit claims, or infusion of capital, or proper diversification of deposits so that the tied up part would not be the only cash stash they have. For some companies these tied up amounts may be significant (e.g.: Roku has almost half a billion there) - these companies are at risk due to exposure.