If you know of any other quality AMP-ready WordPress themes, please let us know using the comment form below. On March 10, 2023, the US banking system was rocked by what is perceived to be the largest bank failure since 2008: the collapse of a major industry player SVB (Silicon Valley Bank). The noteworthy event caused much uncertainty in the banking system and speculation of a potential impending financial crisis. to the failure of Silicon Valley Bank and what it means for the future of the banking industry. What caused the collapse of SVB? Founded in 1983, Silicon Valley Bank was the 16th largest bank in the United States with assets of approximately $16 billion and specialized in technology services companies, venture capitalists and startups (many of which are based in Silicon Valley.
The bank experienced significant
Growth during the pandemic, between 2020 and 2022: as the tech industry soared, SVB’s deposit base tripled. failure is the way it has managed its newly earned funds. Instead of reinvesting it in the technology sector, the bank placed a huge chunk of short-term deposits in long-term mortgage bonds and Treasury bills. In doing so, they aimed Afghanistan Cell Phone Number List to receive low but stable yields, however, this strategy has backfired with the rapid rise in interest rates over the past year . As a result, the value of SVB’s bonds fell significantly, resulting in the bank’s insolvency. On top of that, some big tech companies pulled money from SVB in the weeks following its bankruptcy, due to current challenges in the industry, unexpectedly forcing the bank to sell some of its bonds.
As a result this caused some
Panic from other clients and investors, who were quick to withdraw their funds as well, further straining SVB’s liquidity. What were the consequences? The collapse of Silicon Valley Bank has affected investors and tech companies that held funds at the bank – some of the major ones include Etsy, Roblox, Vox Media and Roku. The event has sparked much Bab Directory fear and uncertainty in both the US banking system and the tech sector at large, with the concerns of other banks following its fate. The fact that two similar smaller organizations, Signature Bank and Silvergate Capital, also went bankrupt on the same weekend further exacerbated the situation.