important point
- Silicon Valley Bank has been closed by the California Department of Financial Protection.
- Trading at several local banks, including crypto-friendly signing banks, was halted after their stocks suffered severe volatility.
- Silicon Valley Bank announced Wednesday that it has taken extraordinary steps to strengthen its financials.
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The Silicon Valley Bank, the 18th largest bank in the United States by total assets, was shut down by regulators today after being hit by a bank run.
Biggest bank failure since the Great Recession
The banking sector has been hit hard.
As early as Friday, the California Department of Financial Protection and Innovation announced announced Closure of Silicon Valley Bank. All his FDIC-insured deposits were transferred from SVB to the National Bank of Deposit Insurance in Santa Clara. The FDIC said all insured depositors will have full access to their insured deposits by March 13, while uninsured depositors will receive a certificate of the amount of their uninsured funds. showed.
Trading in several regional bank stocks, including SVB, Signature Bank, First Republic Bank, PacWest Bancorp and Western Alliance Bancorp, had already been halted following news of liquidity problems at Silicon Valley banks.
At the time of writing, SVB is down 67% on the week, Signature Bank is down 27%, First Republic is down 30%, PacWest Bancorp is down 37% and Western Alliance is down 29%.
Silicon Valley Bank unexpectedly announced Wednesday that it is taking unusual and immediate steps to strengthen its financials. The bank said it sold $21 billion of its most liquid assets, borrowed $15 billion, and organized an emergency sale of shares to raise cash.
The news sparked a wave of withdrawals on Thursday as tech startups, which make up the overwhelming majority of the bank’s customers, sought to move their funds to safer places. CNBC, SVB Financial (the parent company of Silicon Valley Bank) began looking for a sale after failing to raise enough money to bolster its business. At the time of its closure, Silicon Valley Bank was the 18th largest bank in the United States by total assets.
Disclosure: At the time of writing, the author of this work owned BTC, ETH, and several other crypto assets.