• Economy

    Silicon Valley Bank collapses, in biggest failure since financial crisis

    Silicon Valley Bank collapsed on Friday after a run on deposits drove the Northern California institution into insolvency, marking the largest bank failure since the financial crisis.

    The Federal Deposit Insurance Corp. has transferred the bank’s deposits to a new entity in order to protect consumers. Policymakers including Treasury Secretary Janet Yellen had grown increasingly alarmed over the past 24 hours at the prospect of the bank’s failure.

    That’s because nearly half of all Silicon Valley-backed startups and biotechs bank with the institution, which had roughly $175 billion of deposits as of the end of 2022. With $209 billion in assets, SVB’s failure is the biggest since Washington Mutual went under at the height of the 2008 crisis.

    Yellen told Congress that she was monitoring the situation, shortly before the California Department of Financial Protection and Innovation announced it had taken possession of the bank Friday morning.

    “There are recent developments that concern a few banks that I’m monitoring very carefully,” Yellen told lawmakers during a committee hearing Friday. “When banks experience financial losses, it is and should be a matter of concern.”

    Related Posts