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On Friday, March 10, 2023, the US authorities announced that they had closed the “Silicon Valley Bank” (SVB), which is close to the technology community, and which suddenly found itself in difficulty, and that it had entrusted the management of deposits to the Federal Deposit Insurance Corporation in the United States (FDIC).
The Federal Deposit Insurance Corporation in the United States plans to reopen the bank’s 17 branches, which are based in California and Massachusetts, on Monday, March 13, and allow customers to withdraw up to $ 250,000 in the short term, which is the amount that is usually guaranteed by the institution.
The Fed stated that the California Financial Protection and Innovation Authority (DFPI) officially took over the bank, citing “insufficient liquidity and insolvency.”
At the end of 2022, the bank had assets of $209 billion and deposits of $175.4 billion.
Although little known to the public, Silicon Valley Bank was the 16th largest US bank by assets.
The Santa Clara-based Silicon Valley Bank specialized in the technology sector and dealt mainly with clients benefiting from funds from venture capital or startup companies.
Those facing their own struggles between rising interest rates and turmoil in the technology sector have, in recent months, withdrawn a lot of money from their accounts.
In order to secure sufficient liquidity, Silicon Valley Bank announced on Wednesday evening, March 8, that it is seeking to raise capital quickly. After that, its shares lost 60% of their market value on the New York Stock Exchange on Thursday, March 9, and trading was suspended on Friday, March 10.