For our inevitable look at bank regulatory policy.
- Click here for the wiki link.
Silicon Valley Bank (SVB) was a state-chartered commercial bank headquartered in Santa Clara, California that failed on March 10, 2023, with holdings now managed by the Federal Deposit Insurance Corporation (FDIC). SVB was the 16th-largest bank in the United States and was the largest bank by deposits in Silicon Valley. SVB operated branches in California and Massachusetts. The bank composed the primary business of SVB Financial Group, its publicly traded bank holding company which, with other subsidiaries, operated offices in 13 additional U.S. states and in over a dozen international jurisdictions.
SVB, a financial institution that had become the go-to bank for nearly half of all venture-backed tech startups, failed after a run on its deposits triggered by a series of central bank-endorsed interest rate hikes amid a global inflation surge. The California Department of Financial Protection and Innovation (DFPI), its regulator, seized the bank and placed it into the receivership of the FDIC in the second-largest bank failure in U.S. history. On March 12, 2023, a joint statement by Secretary of the Treasury Janet L. Yellen, Federal Reserve Chairman Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg said all depositors at SVB would be fully protected and have access to all of their money – including both insured and uninsured deposits – starting the following Monday, March 13. That day, the newly-created and FDIC-administered successor, Silicon Valley Bridge Bank, N.A., a bridge bank, began operations and assumed ongoing business.
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Why did it fail?
- From Economics Observatory: Why did Silicon Valley Bank fail?
- Al Jazeera: Why did Silicon Valley Bank fail and is a financial crisis next?
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What might the consequences be?
- Al Jazeera: US, UK try to stem fallout from Silicon Valley Bank collapse.
