Silicon Valley: Biggest Bank Collapse Since 2008 Crisis Causes Ripple Effect In The US and EU

On Friday, the California banking industry regulators announced their decision to close down Silicon Valley Bank, also known as SVP Financial Group.

The swift action taken by the regulators has left many industry experts stunned, as this is considered the biggest bank failure since the 2008 financial crisis that caused the banking sector to shed billions in market capitalization.

SVB Under Receivership By FDIC

The California regulator called in the Federal Deposit Insurance Corporation (FDIC) as a receiver to dispose of the failed bank’s assets. This move is common in the US banking industry, where the FDIC protects depositors’ interests and manages the liquidation of a failed bank’s assets.

SVB is the first FDIC-certified financial institution to fail in 2023. However, the good news for depositors of Silicon Valley Bank is that they will have complete access to their deposits. In addition, according to the receiver’s statement, the bank’s main office and branch in Silicon Valley will reopen on March 13th, relieving many worried about their inaccessible money.

In addition to depositors, many employees of tech startups and companies in Silicon Valley had their paychecks with the bank. As a result, it is causing concern for many, as they are still determining if they can access their funds.

For example, Dean Nelson, CEO at Cato Digital, was part of a crowd gathering at the SVB headquarters in Santa Clara. He worries about the bank’s ability to pay employees and cover expenses.

Dean Nelson emphasized that access to cash is a big headwind for many companies in Silicon Valley, and cash flow is critical. Many startups and companies rely on quick and efficient access to cash to keep their operations running smoothly.

The Ripple Effect of Silicon Valley Bank’s Failure

The impact of the Silicon Valley Bank failure is not just limited to the affected bank, as it has caused a ripple effect in the banking industry. According to Reuters, banks in the US have lost a combined $100 billion in stock, while their counterparts in the Eurozone have lost a combined $50 billion.

US Treasury Secretary Janet Yellen has expressed full confidence in responding to this dangerous situation. The White House has also backed this statement, saying they have faith and full confidence in their regulators.

In addition, Cecilia Rouse, the Chair of the Council of Economic Advisers, has also provided reassurance by stating that the banking system is stronger than the pitfalls of 2008, and the situation will be resolved.

The FDIC has announced that it will sell Silicon Valley Bank’s assets, and uninsured depositors of the bank will be paid through future dividends.

Leave a Reply

Your email address will not be published.


Investors Excited As XRP Market Capitalization Hits $20 Billion

It’s been wide jubilation today after XRP investors heard the announcement that the market capitalization has surged to $20 billion. XRP: a cryptocurrency developed and managed by Ripple, a San Francisco, United States, distributed data company. It was gathered that the coin itself responded to this development through a climb in price – it was […]

GlobalTrades Review, – Is Global Trades Scam or a Good Broker?

GlobalTrades Trading Platform Rating 4.6 Summary Read our Global Trades review at FStar Capital Forex and Cryptocurrency Trading blog, find the answer to your question “is scam or legit” and much more! GlobalTrades Review As people look at cryptocurrencies and their immense success, they are eager to start their own trading businesses. While […]

Belgium Regulator Sets To Impose New Crypto Ads Rules

The Belgium government has mandated that every firm offering crypto advertisements should register with it before launching any campaign. Henceforth, any crypto advertisement without the government’s backing would be treated as an offense with heavy consequences. According to the report, the Financial Services and Markets Authority (FSMA) of Belgium recently announced that every potential crypto […]

Profit-taking on BTC Surge, As Price Breaks The $27,000 Threshold

It has just been confirmed that BTC has experienced the most extensive profit-taking activity since the last quarter of 2020. This information was obtained from data released by Santiment, an on-chain data analytics company. The released data also states that the profit-to-loss volume of the day-to-day ratio on on-chain transactions was one of the major […]

Governments Who ban Drugs Should Ban Crypto Too, Said Belgium’s Ex-Finance Minister

The former finance minister of Belgium, Johan Van Overtveldt, reportedly suggested that any country that bans drugs should also ban crypto assets. According to reports, he made the statement during the recently concluded European Parliament meeting. During the meeting, the parliament was reportedly deliberating on the effect the recent collapse of three crypto-friendly banks, Silvergate […]