Several forces collided to take down the banker.įirst, there was the Federal Reserve, which began raising interest rates a year ago to tame inflation. The longer version is a bit more complicated. In short, SVB encountered a classic run on the bank. While relatively unknown outside of Silicon Valley, SVB was among the top 20 American commercial banks, with $209 billion in total assets at the end of last year, according to the FDIC. It provided financing for almost half of US venture-backed technology and health care companies. Here’s what we know about the bank’s downfall, and what might come next.įounded in 1983, SVB specialized in banking for tech startups. It was the largest failure of a US bank since Washington Mutual in 2008. Silicon Valley Bank, facing a sudden bank run and capital crisis, collapsed Friday morning and was taken over by federal regulators. Takeaways from America's second-largest bank failure Prior to being shut down by regulators, shares of SVB were halted Friday morning after falling more than 60% in premarket trading following a 60% declined on Thursday when the bank sold off a portfolio of US Treasuries and $1.75 billion in shares to cover declining customer deposits. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. People line up outside of the shuttered Silicon Valley Bank (SVB) headquarters on Main Santa Clara, California.
