Canada’s banking regulator has temporarily seized the assets of Silicon Valley Bank’s lone Canadian branch located in Toronto after the financial institution collapsed.

In a statement issued on Wednesday, the Office of the Superintendent of Financial Institutions or OSFI announced the measure, after it took temporary control of the troubled Santa Clara, California-headquartered bank on Sunday, as the crisis over its failure in the United States was unfolding.

OSFI also said that the Ontario Superior Court of Justice granted a winding up order in respect of the institution.

In the statement, OSFI said that will start “an orderly, court-supervised process to restructure the branch as a result of the newly created, full-service U.S. Federal Deposit Insurance Corporation or FDIC ‘bridge bank’, Silicon Valley Bridge Bank, NA, “in a way that best serves the interests of its creditors and will allow operations of the Silicon Valley Bank to continue in Canada.”

“The process is intended to facilitate an orderly transition of the Canadian branch of Silicon Valley Bank to the FDIC Bridge Bank,” it added.

Peter Routledge, OSFI head and Superintendent of Financial Institutions, said “I took this action to affect an orderly transition of the Canadian branch of Silicon Valley Bank to the FDIC bridge bank. I am satisfied that this approach, developed with officials in the United States, is in the best interest of the branch’s creditors”.

The court appointed Price Waterhouse Coopers Inc consultancy to oversee the transition.

The statement pointed out that SVB’s Canadian business is “focused primarily lending to corporate clients, and as such does not hold any commercial or individual deposits.”

SVB had been operating in Toronto as a foreign bank branch since February 2019.

Amid fear of the banking crisis in the US following the failure of SVB could spark a contagion infecting Canada, Deputy Prime Minister and Finance Minister Chrystia Freeland issued a statement late on Tuesday evening stressing that Canadian “financial institutions are stable and resilient.”

Silicon Valley Bank served mostly technology workers and venture capital-backed companies, including some of the industry’s best-known brands. It is one of the biggest bank failures in U.S. history.

Image source: Reuters