Silicon Valley Bank was a commercial bank headquartered in Santa Clara, California. SVB was the 16th-largest bank in the United States at the time of its failure on March 10, 2023, and was the largest bank by deposits in Silicon Valley. It was a subsidiary of the bank holding company SVB Financial Group. SVB was the bank for tech startups in Silicon Valley (California). Silicon Valley Bank was the bank that financed and at the same time deposited the money of many such startups.
My impression is that the bankruptcy of the bank represented a deepening of the bursting of the tech and crypto bubble of 2020-2021. We have a new victim of the FED's interest rate hikes in the field most vulnerable to such moves: tech startups. Exactly the field that was in the bubble until 2021.
Here's how I understand things:
But there's a happy ending for this story, because the SVB's bank accounts owners were saved by the US state:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
Source - https://home.treasury.gov/news/press-releases/jy1337
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