by Silicon Valley Bank customers were seen outside a location in Menlo Park, California, on Friday after the Federal Deposit Insurance Corporation seized their assets. (coin telegraph)
Customers were seen outside a Silicon Valley Bank location in Menlo Park, California, on Friday after the Federal Deposit Insurance Corporation (FDIC) seized the bank’s assets.
In the biggest bank failure since the 2008 financial crisis, Silicon Valley Bank (SVB) collapsed after worried savers worried about the health of the bank rushed to withdraw their money.
Video captured on a smartphone shows a line of people waiting outside the bank, reminiscent of scenes from the 1930s of a bank run during the Great Depression.
SVB was the 16th largest bank in the United States until it was shut down by California regulators on Friday afternoon. The bank supported a number of start-ups from the technology sector. Y Combinator, an incubator startup that launched Airbnb, DoorDash, and DropBox, has regularly referred entrepreneurs to them.
THE FAILURE OF SILICON VALLEY BANK MARKS THE WORST BANK FAILURE SINCE THE GREAT RECESSION
A person from Silicon Valley Bank, center rear, speaks to people waiting outside an entrance to Silicon Valley Bank on Friday, March 10, 2023 in Santa Clara, California. The Federal Deposit Insurance Corporation seized the bank’s assets on F (AP Photo/Jeff Chiu/AP Newsroom)
Y Combinator CEO Garry Tan called the collapse of SVB an “annihilation-level event” for startup tech companies.
“I’ve heard from literally hundreds of our founders asking for help on how to get through this. They’re like, ‘Do I have to furlough my workers?’” Tan told the Associated Press.
SILICON VALLEY BANK CLOSED BY REGULATORS
Silicon Valley Bank headquarters in Santa Clara, California, Friday, March 10, 2023. (Philip Pacheco/Bloomberg via Getty Images/Getty Images)
The decline in technology stocks and layoffs in industry contributed to the bank’s failure.
The banks Stocks were down 60% on Friday morning after already falling 60% on Thursday. SVB had sold $1.75 billion worth of stock to offset falling customer deposits.
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SIVB | SVB FINANCIAL GROUP | 106.04 | -161.79 | -60.41% |
The California Department of Financial Protection and Innovation (DFPI) took control of SVB after its bankruptcy and appointed the FDIC as receiver. The FDIC then created the Deposit Insurance National Bank of Santa Clara (DINB), where former SVB customers can access their insured deposits.
SILVERGATE CAPITAL TURNS OFF BUSINESS; WILL VOLUNTARY LIQUID
A customer stands outside a closed Silicon Valley Bank (SVB) headquarters in Santa Clara, California, March 10, 2023. (Justin Sullivan/Getty Images/Getty Images)
The FDIC said Friday that all insured depositors will have access to their insured deposits up to the legal limit of $250,000 no later than Monday, March 13, 2023
SVB had 17 stores in California and Massachusetts. As of 2022, the bank had approximately $209.0 billion in total assets and approximately $175.4 billion in total deposits. The FDIC said the amount of deposits exceeding insurance limits was undetermined at the time the bank closed.
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Customers with deposits greater than $250,000 have been directed to contact the FDIC at 1-866-799-0959.
Andrea Vacchiano of FOX Business and Associated Press contributed to this report.
