Silicon Valley Bank has Collapsed Since 2008

Silicon Valley Bank has Collapsed Since 2008

After US regulators shut down US-based commercial lender SVB Financial Group on Friday as a result of an accelerated decline in its stock that caused a market loss of over $80 billion, global banking and financial equities suffered severely.

Details about Silicon Valley Bank has Collapsed Since 2008:

The abrupt collapse of Silicon Valley Bank left billions of assets belonging to businesses, investors, and depositors stranded, making it the largest US bank to fail since the 2008 financial crisis.

Following the bank’s disclosure that it intended to raise money worth more than $2 billion to close gaps in its balance sheet, the SVB crisis materialised in under 48 hours. This caused a significant selloff and widespread panic among its customers and depositors.

SVB was forced to abandon its fundraising strategy as investors and depositors’ anxiety increased, but the harm had already been done.

California regulators shut down the troubled lender on Friday, placing it under the supervision of the US Federal Deposit Insurance Corporation (FDIC).

The overnight shock followed another steep 60% decrease in premarket trading for SVB’s stock as anxious depositors hurried to withdraw money, which caused the decline.

After an unsuccessful fundraising effort, the SVB Financial Group attempted to sell itself, but to no avail as deposits were “very swiftly” withdrawn. The organisation even instructed its staff to work remotely until further notice as the problem developed.

The California Department of Financial Protection and Innovation closed SVB shortly after, and the FDIC soon after acknowledged that it had been named the receiver and closed SVB. SVB is the first FDIC-insured bank to fail in more than two years, it should be noted.

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