The Bank of Silicon Valley collapsed during the largest bankruptcy since the Great Recession in 2008.

Silicon Valley Bank (SVB), the 16th largest bank in the United States, faced the biggest crises after the 2008 financial catastrophe. Friday, March 10, 2023, is a devastating day for Silicon Valley Bank. The California Department of Financial Protection and Innovation shut down the bank after the run on deposits.

Note: The information in this article can be changed with the event's progress, and the updates are reported rapidly.  

 SVB exclusively works with startups and gulf companies. Additionally, it is one of the leading financial institutions and the most significant lender that also lends to people across the country. For decades, it won hearts globally. Being a golden period for startups and pre-established tech companies, SVB's services have been in high demand during the pandemic of 2020. But recently, it came across the most prominent financial collapse due to ill-fated decisions and misfortune. In 2022, SVB started to experience a steep loss associated with the increased interest rates and deterioration in the tech industry, which was the primary liability of the bank. Gradually, the circumstances continued to become challenging, and in early March, it encountered a historical collapse in US history. 

An enormous tech industry sector used SVD to keep the money they used for payroll and other business purposes. This led to an influx of deposits to the SVB, as these companies chose to put their liquidity into the bank. Several companies may have chosen to do this because SVB has expertise in the tech industry, which may make it easier for them to understand the unique financial needs of these businesses.

Moreover, SVB offers specialized banking products and services adapted to the technology industry, such as loans and venture capital. Using SVB, technology companies can capitalize on these offerings and access the necessary resources to grow and succeed.

The bank invested a considerable portion of the stakes, as banks do, but unfortunately, SVB lost its stock by 80% in the past few days and 60% in a single day, reported CNN. The SVB customers are demanding their money back from the bank. The crisis is a critical time not only for the customers but for the bank and the government. However, to counter the risk, the Federal Reserve brought resolutions to protect the account holders and initiated a new program that allows banks to borrow funds backed by government securities to meet demands from deposit customers.

"My ask is to calm, because that's what is important. We have been your long-term supporters - the last thing we need to do is panic."

Gerg Becker | CEO, Silicon Valley Bank