Canada's banking regulator says in light of the decision by the California Department of Financial Protection and Innovation to shut down Silicon Valley Bank, it has temporarily seized assets of the Canadian branch to preserve their value.

U.S. banking regulators were forced to urgently close the California-based institution on Friday after billions of dollars were withdrawn by fearful depositors.

In a statement, Canada's Office of the Superintendent of Financial Institutions says the bank operates in this country as a foreign bank branch based in Toronto, which it supervises.

It notes Silicon's business in Canada is primarily lending to corporate clients, and that the branch does not hold any commercial or individual deposits in Canada.

Superintendent Peter Routledge has also given notice of an intention to seek permanent control of the Canadian branch's assets and is requesting the Attorney General of Canada apply for a winding-up order.

Routledge says by taking temporary control, the OSFI is acting to protect the rights and interests of the branch's creditors.

He stresses the Silicon Valley Bank branch in Canada does not take deposits from Canadians, and this situation is the result of circumstances particular to Silicon Valley Bank in the United States.

Silicon Valley Bank served mostly technology workers and venture capital-backed companies, including some of the industry's best-known brands.

It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008.

Canada's regulator says it has closely monitored Silicon Valley Bank's Canadian branch since the onset of the bank's difficulties. It further states that consistent with globally accepted international Basel III standards, it "continues to undertake diligent supervision of federally regulated banks in Canada, including robust requirements for capital and liquidity adequacy.''

This report by The Canadian Press was first published March 13, 2023.