In the United States, Silicon Valley Bank failed. The 16th largest bank in the US ($200 billion) has financed Silicon Valley startups. 89% of deposits totaling $175 billion were uninsured.
Silicon Valley Bank (SVB) closed and transferred to the Deposit Insurance Commission, says in the report of the FDIC (Federal Deposit Insurance Corporation).
SVB was ranked 16th in the list of the largest US banks, its capitalization was $200 billion. data at the end of 2022, 89% of its deposits totaling $175 billion were uninsured. Companies such as video game developer Roblox and media player maker Roku had large deposits at the bank.
The FDIC said that insured depositors will have access to deposits no later than the morning of Monday, March 13. Uninsured savers can expect to receive an initial dividend within the next week.
“Uninsured depositors will receive a management certificate for the remaining amount of their uninsured funds. Because the FDIC is selling Silicon Valley Bank’s assets, future dividend payments may be made to uninsured savers,” the FDIC said.
SVB specializes in financing technology startups in Silicon Valley. Most of the bank’s clients are start-ups that have received financing from venture capitalists (the bank has helped finance more than 30,000 start-ups).
On March 9, SVB announced a loss of $1.8 billion. The release of the report coincided with news of the closure of California-based cryptocurrency bank Silvergate and caused Panic among investors. Depositors began withdrawing funds from SVB en masse, leading to a sharp decline in liquidity. SVB shares collapsed 60% in two days, trading in the bank’s securities was halted.
Associated Press gradesthat the SVB bankruptcy was the biggest banking collapse since the 2008 crisis, when Washington Mutual Bank declared bankruptcy. Gary Tan, CEO of Y Combinator, the world’s leading startup incubator, called the collapse of SVB “an extinction-level event for startups.”
Author:
Kirill Bilyk
Source: RB
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