Ashish Ranjan
Silicon Valley Bank Collapse: Friday’s collapse of Silicon Valley Bank, which was known for lending money to some of the largest technology firms, sent investors and depositors into a frenzy. The global markets fell significantly, with bank stocks suffering the most.
Here are 10 points about the Silicon Valley Bank Collapse:
1.The Silicon Valley Bank was shut down by California banking regulators on Friday. This is the largest debacle in retail banking since the 2008 global financial crisis.
2.Friday, US regulators shut down Silicon Valley Bank (SVB) and seized its deposits, marking the largest retail banking failure since the global financial crisis.
3.The decision followed a tumultuous 48 hours that saw the share price of the high-tech lender plummet amid a run on deposits by concerned customers.
4.After amassing a vast fortune through investments in tech firms, Silicon Valley Bank allocated the majority of its assets to US bonds. In an effort to reduce inflation rates, the Federal Reserve began increasing interest rates last year, resulting in a decline in the value of bonds.
5.After the Covid pandemic, startup funding began to dry up, resulting in a large number of bank customers withdrawing funds.
6.In order to comply with their requests, Silicon Valley Bank was compelled to sell some of its investments despite the decline in their value.
7.The bank disclosed earlier this week that it had suffered losses of nearly $2 billion.
After the bank’s closure, the Federal Deposit Insurance Corporation now controls nearly $175 billion in consumer deposits (FDIC).
8.The FDIC has established the National Bank of Santa Clara, which will now retain all of Silicon Valley Bank’s assets.
9.The FDIC assured depositors that they will have complete access to their insured deposits once all bank branches reopen on Monday morning. The financial institution also stated that the former bank’s checks would be honoured.
10.The precipitous demise of SVB has enraged a vast number of Silicon Valley entrepreneurs. In Washington, politicians are taking sides, with officials from the Biden administration expressing “complete confidence” in regulators.
