Silicon Valley Bank collapsedOn March 10, 2023, Silicon Valley Bank (SVB), a wholly-owned subsidiary of SVB Financial Group, suffered a collapse following a capital crisis, resulting in the second-largest failure of a financial institution in US history.
California regulators closed the tech lender and placed it under the control of the US Federal Deposit Insurance Corporation (FDIC), an independent government agency responsible for insuring bank deposits and overseeing financial institutions. The FDIC will act as a receiver, liquidating the bank's assets to repay its customers, including depositors and creditors.
The FDIC assured insured depositors of full access to their insured deposits no later than Monday morning. Additionally, uninsured depositors would receive an "advance dividend" within the next week.
Despite the initial panic on Wall Street, experts predict that Silicon Valley Bank's
collapse is unlikely to cause the domino effect seen during the financial crisis. Moody's chief economist, Mark Zandi, pointed out that the banking industry is currently well-capitalized and liquid, and that the banks in trouble are too small to pose a significant threat to the broader system.
, a crypto-focused lender, announced on March 8, 2023 that it is winding down operations and will liquidate the bank after suffering financial losses due to digital asset turmoil. Another lender, Signature Bank, also experienced a significant drop in shares and was temporarily halted due to volatility on March 10, 2023.
Date: 12.03.2023 [ID: 376]