At the time of its collapse, Silicon Valley Bank had $209 billion in total assets, as stated by the FDIC. It is uncertain how much of the bank’s deposits exceeded the $250,000 insurance limit during that period, but earlier regulatory reports indicated that a significant portion of the bank’s deposits surpassed that threshold.
Following a bank run, US regulators take control of SVB’s assets, while global institutions keep a close eye on the situation.
What was the reason behind the failure of Silicon Valley Bank?
On Friday, there was a bank run on Silicon Valley Bank, a prominent technology lender, leading US regulators to swiftly seize its assets. This event marks the most significant failure of such an institution since the peak of the financial crisis over ten years ago.
SVB, which ranks as the 16th biggest bank in the US, experienced a collapse when depositors, primarily technology workers and companies supported by venture capital, raced to withdraw their funds this week due to growing apprehension regarding the bank’s condition.
At the time of its collapse, Silicon Valley Bank had $209 billion in total assets, as stated by the FDIC. It is uncertain how much of the bank’s deposits exceeded the $250,000 insurance limit during that period, but earlier regulatory reports indicated that a significant portion of the bank’s deposits surpassed that threshold.
However, Silicon Valley’s association with the technology industry quickly turned into a disadvantage. In the last 18 months, tech stocks have suffered a severe blow following a growth spurt during the pandemic, resulting in widespread layoffs throughout the sector.
Tyrner stated that she conversed with some friends who had the support of venture capital, and they were extremely distraught over the bank’s collapse. On Thursday, Tyrner’s Chief Operating Officer attempted to withdraw her firm’s funds, but it was too late.
