Here’s a lowdown on Silicon Valley Bank (SVB) & its collapse:
SVB bank was one of the largest banks in the US that served clients in the innovation economy. It failed on March 12, 2023, & the federal government intervened & guaranteed that all depositors will have access to their money as of March 13. The authorities also shut down another bank, Signature Bank.
SVB bank was founded in 1983 & specialized in banking for tech startups. It provided financing for almost half of US venture-backed technology & healthcare companies. It was one of America’s 20 largest commercial banks, with US $209 billion in total assets at the end of last year. It was also known for supporting founders & innovators in the innovation economy.
However, SVB bank suffered from high-interest rates that made borrowing more expensive & reduced the value of its securities. It also faced dwindling venture capital funding for its tech clients. It announced that it needed to raise US $2.25 billion to shore up its balance sheet on March 10, 2023. This triggered a panic among its customers who withdrew their deposits rapidly. By March 12, customers tried to withdraw a staggering $42 billion of deposits. This led to SVB bank’s insolvency & closure by California regulators.
The Federal Deposit Insurance Corporation (FDIC), which took SVB into receivership Friday when the bank closed, is holding an auction with the Treasury Dept. & other regulators to find a buyer for the bank as quickly as possible.
This is what SVB had to say…..
SVB: A startup bank’s rise and fall – Axios.com
Illustration: Tiffany Herring/AxiosGiven how deeply and widely its roots run across the industry, Silicon Valley Bank — dramatically seized on Friday by the federal government amid a crippling bank run and a swooning stock — couldn’t have a more apt name.Why it matters: The stunning events of the…
Link: SVB: A startup bank’s rise and fall
via www.axios.com
