| | 1 | {{Short description|2023 receivership of an American commercial bank}} |
| | 2 | {{Use American English|date=March 2023}} |
| | 3 | {{Use mdy dates|date=March 2023}} |
| | 4 | [[File:3003 West Tasman Drive entrance 2, Santa Clara, California.jpg|thumb|Silicon Valley Bank headquarters in [[Santa Clara, California]], on March 13.|alt=An entrance to an office building with the words "Silicon Valley Bank" above the doorway and the company's rightward-pointing chevron logo in the window above it.|263x263px]] |
| | 5 | {{2023 United States bank failures sidebar}} |
| | 6 | |
| | 7 | On March 10, 2023, [[Silicon Valley Bank]] (SVB) [[Bank failure|failed]] after a [[bank run]], marking the [[List of largest U.S. bank failures|second-largest bank failure in United States history]] and the largest since the [[2008 financial crisis]].<ref>{{Cite news |last1=Copeland |first1=Rob |last2=Flitter |first2=Emily |last3=Farrell |first3=Maureen |date=March 10, 2023 |title=Silicon Valley Bank Fails After Run by Venture Capital Customers |url=https://nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html |url-access=subscription |url-status=live |archive-url=https://web.archive.org/web/20230310171005/https://www.nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html |archive-date=March 10, 2023 |access-date=March 10, 2023 |work=[[The New York Times]]}}</ref><ref name="NYT-20230313">{{cite news |last=Warren |first=Elizabeth |authorlink=Elizabeth Warren |title=Elizabeth Warren: We Can Prevent More Bank Failures |url=https://www.nytimes.com/2023/03/13/opinion/elizabeth-warren-silicon-valley-bank.html |date=March 13, 2023 |work=[[The New York Times]] |url-status=live |archiveurl=https://archive.ph/CRzkf |archivedate=March 13, 2023 |accessdate=March 13, 2023 }}</ref> It was one of three [[March 2023 United States bank failures]]. |
| | 8 | |
| | 9 | Seeking higher investment returns, in 2021 SVB began shifting its [[marketable securities]] portfolio from short-term to long-term [[United States Treasury security|Treasury bonds]]. The market value of these bonds decreased significantly through 2022 and into 2023 as the [[Federal Reserve]] raised [[interest rates]] to curb [[2021–2023 inflation surge|an inflation surge]], causing unrealized losses on the portfolio.<ref>{{Cite news |date=March 10, 2023 |title=Why did Silicon Valley Bank fail? |language=en-GB |work=[[The Guardian]] |agency=[[Reuters]] |url=https://www.theguardian.com/us-news/2023/mar/10/silicon-valley-bank-collapse-explainer |access-date=March 13, 2023 |issn=0261-3077 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313025226/https://www.theguardian.com/us-news/2023/mar/10/silicon-valley-bank-collapse-explainer |url-status=live }}</ref><ref>{{Cite web |last=Pandolfo |first=Chris |date=March 14, 2023 |title=Silicon Valley Bank committed 'one of the most elementary errors in banking,' Larry Summers says |url=https://finance.yahoo.com/news/silicon-valley-bank-committed-one-135059554.html |access-date=2023-03-15 |website=[[Yahoo! Finance]] |language=en-US |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314185835/https://finance.yahoo.com/news/silicon-valley-bank-committed-one-135059554.html |url-status=live }}</ref> Higher interest rates also raised borrowing costs throughout the economy and some Silicon Valley Bank clients started pulling money out to meet their liquidity needs. To raise cash to pay withdrawals by its depositors, SVB announced on March 8 that it had sold over US$21 billion worth of securities, borrowed $15{{nbsp}}billion, and would hold an emergency sale of some of its [[treasury stock]] to raise $2.25{{nbsp}}billion. The announcement, coupled with warnings from prominent Silicon Valley investors, caused a bank run as customers withdrew funds totaling $42{{nbsp}}billion by the following day. |
| | 10 | |
| | 11 | On the morning of March 10, 2023, the [[California Department of Financial Protection and Innovation]] seized SVB and placed it under the receivership of the [[Federal Deposit Insurance Corporation]] (FDIC). About 89 percent of the bank's $172{{nbsp}}billion in deposit liabilities exceeded the maximum insured by the FDIC.<ref name="reuters_fwj">{{Cite news |last1=French |first1=David |last2=Wang |first2=Echo |last3=John |first3=Alun |date=March 10, 2023 |title=Silicon Valley Bank is largest failure since financial crisis, billions stranded |work=[[Reuters]] |url=https://www.reuters.com/business/finance/global-markets-banks-wrapup-1-2023-03-10/ |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230311105258/https://www.reuters.com/business/finance/global-markets-banks-wrapup-1-2023-03-10/ |archive-date=March 11, 2023}}</ref><ref name="FDIC_public_notice">{{cite press release |location=Washington |publisher=[[Federal Deposit Insurance Corporation]] |title=FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California |url=https://www.fdic.gov/news/press-releases/2023/pr23016.html |date=March 10, 2023 |archive-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310164633/https://www.fdic.gov/news/press-releases/2023/pr23016.html |url-status=live}}</ref> Two days after the failure, the FDIC received exceptional authority from the Treasury and announced jointly with other agencies that all depositors would have full access to their funds the next morning.<ref name="Allyn" /><ref name="treasury pr 12mar" /> Seeking to auction off all or parts of the bank, the FDIC reopened it on March 13 as a newly organized [[bridge bank]], Silicon Valley Bridge Bank, N.A.<ref name="pr23019">{{cite press release |title=FDIC Acts to Protect All Depositors of the former Silicon Valley Bank, Santa Clara, California |publisher=[[Federal Deposit Insurance Corporation]] |location=Washington, D.C. |date=March 13, 2023 |accessdate=March 13, 2023 |url=https://www.fdic.gov/news/press-releases/2023/pr23019.html |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313101120/https://www.fdic.gov/news/press-releases/2023/pr23019.html |url-status=live }}</ref><ref name="FDIC_public_notice"/><ref name="pr23019" /><ref>{{cite news |last1=Farrell |first1=Maureen |date=March 14, 2023 |title=Inside the Collapse of Silicon Valley Bank |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/14/business/silicon-valley-bank-gregory-becker.html |access-date=March 15, 2023 |archive-date=March 15, 2023 |archive-url=https://web.archive.org/web/20230315101156/https://www.nytimes.com/2023/03/14/business/silicon-valley-bank-gregory-becker.html |url-status=live }}</ref> Although some characterized the government response as a [[bailout]], the plan did not entail rescuing the bank, its management or shareholders, but rather making uninsured depositors whole from the proceeds of selling the bank's assets, without the use of taxpayer money.<ref>{{cite news |last1=Allyn |first1=Bobby |title=The White House is avoiding one word when it comes to Silicon Valley Bank: bailout |url=https://www.npr.org/2023/03/13/1163180140/silicon-valley-bank-is-it-a-bailout-barofsky |publisher=[[NPR]] |date=March 14, 2023 |access-date=March 16, 2023 |archive-date=March 15, 2023 |archive-url=https://web.archive.org/web/20230315182325/https://www.npr.org/2023/03/13/1163180140/silicon-valley-bank-is-it-a-bailout-barofsky |url-status=live }}</ref> |
| | 12 | |
| | 13 | The collapse of SVB had significant consequences for [[startup]]s in the U.S. and abroad,<ref>{{Cite web |last2=Cherry |first2=Daisy |last1=Cheng |first1=Evelyn |title=Silicon Valley Bank collapse hits startups as far away as China |url=https://www.cnbc.com/2023/03/13/silicon-valley-bank-collapse-hits-startups-as-far-away-as-china.html |access-date=2023-03-13 |website=CNBC |language=en |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313151304/https://www.cnbc.com/2023/03/13/silicon-valley-bank-collapse-hits-startups-as-far-away-as-china.html |url-status=live }}</ref> with many briefly unable to withdraw money from the bank.<ref>{{Cite news |date=2023-03-13 |title=Some SVB Clients Are Finally Regaining Account Access |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2023-03-13/some-svb-clients-are-finally-starting-to-regain-account-access |access-date=2023-03-15 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313174741/https://www.bloomberg.com/news/articles/2023-03-13/some-svb-clients-are-finally-starting-to-regain-account-access |url-status=live }}</ref> Other large technology companies, media companies, and wineries were also affected. For a number of founders and their venture capital backers, this was the bank of choice. Its stock price roughly tripled from 2018 to 2021.{{citation needed|date=March 2023}} |
| | 14 | |
| | 15 | ==Background== |
| | 16 | {{main|Silicon Valley Bank}} |
| | 17 | |
| | 18 | SVB was a [[commercial bank]] founded in 1983 and headquartered in [[Santa Clara, California]]. At its collapse, SVB was the 16th largest bank in the U.S. and was heavily skewed toward serving companies and individuals from the technology industry.<ref name="Russell-2023">{{Cite news |last1=Russell |first1=Karl |last2=Zhang |first2=Christine |date=March 11, 2023 |title=The Second-Biggest Bank Failure |work=[[The New York Times]] |url=https://www.nytimes.com/interactive/2023/03/10/business/bank-failures-silicon-valley-collapse.html |access-date=March 11, 2023 |issn=0362-4331 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311091407/https://www.nytimes.com/interactive/2023/03/10/business/bank-failures-silicon-valley-collapse.html |url-status=live }}</ref><ref name="blaw-pollard">{{cite news |last=Pollard |first=Amelia |date=March 10, 2023 |title=Silicon Valley Bank Collapses in Biggest Failure Since 2008 |work=[[Bloomberg Law]] |url=https://news.bloomberglaw.com/crypto/silicon-valley-bank-collapses-enters-fdic-receivership |url-status=live |archive-url=https://web.archive.org/web/20230310190224/https://news.bloomberglaw.com/crypto/silicon-valley-bank-collapses-enters-fdic-receivership |archive-date=March 10, 2023}}</ref><ref name="APNewsInfo">{{Cite news |last=Sweet |first=Ken |date=March 10, 2023 |title=Silicon Valley Bank is seized by US after historic failure |work=[[Associated Press]] |agency= |url=https://apnews.com/article/svb-fed-bonds-rates-banks-inflation-a24b28b3caeede91c76cd120aa9b7966 |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310180917/https://apnews.com/article/svb-fed-bonds-rates-banks-inflation-a24b28b3caeede91c76cd120aa9b7966 |archive-date=March 10, 2023}}</ref> Nearly half of U.S. [[venture capital]]-backed healthcare and technology companies were financed by SVB.<ref name="Maruf-2023">{{Cite news |last1=Maruf |first1=Ramishah |last2=Morrow |first2=Allison |date=March 11, 2023 |title=How does a bank collapse in 48 hours? A timeline of the SVB fall |work=[[CNN Business]] |url=https://www.cnn.com/2023/03/11/business/svb-bank-collapse-explainer-timeline/ |url-status=live |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311144018/https://www.cnn.com/2023/03/11/business/svb-bank-collapse-explainer-timeline/ |archive-date=March 11, 2023}}</ref> Companies such as [[Airbnb]], [[Cisco]], [[Fitbit]], [[Pinterest]], and [[Block, Inc.]] have been clients of the bank.<ref>{{Cite news |last=Wile |first=Rob |date=March 10, 2023 |title=Silicon Valley Bank shutdown: How it happened and what comes next |work=[[NBC News]] |url=https://www.nbcnews.com/business/business-news/silicon-valley-bank-collapse-news-updates-rcna74384 |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310202626/https://www.nbcnews.com/business/business-news/silicon-valley-bank-collapse-news-updates-rcna74384 |archive-date=March 10, 2023}}</ref> In addition to financing venture-backed companies, SVB was well known as a source of [[private banking]], personal credit lines, and mortgages to tech entrepreneurs,<ref>{{Cite news |last1=Gittelsohn |first1=John |last2=Murphy |first2=Margi |last3=Miller |first3=Hannah |date=March 10, 2023 |title=SVB Rocks California as Founders Join Napa Vintners in Fear |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-10/svb-rocks-california-as-rich-founders-join-napa-vintners-in-fear |url-status=live |url-access=subscription |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311010029/https://www.bloomberg.com/news/articles/2023-03-10/svb-rocks-california-as-rich-founders-join-napa-vintners-in-fear |archive-date=March 11, 2023}}</ref> and specialized lending money to higher-risk new companies.<ref name=":1">{{Cite news |last1=Griffith |first1=Erin |last2=Isaac |first2=Mike |date=March 13, 2023 |title=After Bank Debacle, Silicon Valley Reckons With Its Image |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/13/technology/silicon-valley-image.html |access-date=March 13, 2023 |issn=0362-4331 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313234604/https://www.nytimes.com/2023/03/13/technology/silicon-valley-image.html |url-status=live }}</ref> Silicon Valley Bank required an exclusive relationship of those borrowing from the bank.<ref>{{Cite news |last=Loizos |first=Connie |date=March 11, 2023 |title=Investor Mark Suster says a "handful" of bad actors in VC destroyed Silicon Valley Bank |website=[[TechCrunch]] |url=https://techcrunch.com/2023/03/10/investor-mark-suster-says-a-handful-of-bad-actors-in-vc-destroyed-silicon-valley-bank/ |url-status=live |access-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230311223514/https://techcrunch.com/2023/03/10/investor-mark-suster-says-a-handful-of-bad-actors-in-vc-destroyed-silicon-valley-bank/ |archive-date=March 11, 2023 }}</ref> Prior to March 9, 2023, SVB was in "sound financial condition", according to the [[California Department of Financial Protection and Innovation]],<ref name="Yaffe-Bellany-2023">{{Cite news |last1=Yaffe-Bellany |first1=David |last2=Griffith |first2=Erin |last3=Isaac |first3=Mike |date=March 11, 2023 |title=Silicon Valley Bank Collapse Sets Off Blame Game in Tech Industry |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/11/technology/silicon-valley-bank-crypto-investing.html |access-date=March 11, 2023 |issn=0362-4331 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311164139/https://www.nytimes.com/2023/03/11/technology/silicon-valley-bank-crypto-investing.html |url-status=live }}</ref> though an increased number of [[Short (finance)|short sellers]] began to target SVB earlier in the year.<ref>{{Cite news |last1=Kinder |first1=Tabby |last2=McCrum |first2=Dan |last3=Gara |first3=Antoine |last4=Franklin |first4=Joshua |date=February 22, 2023 |title=Silicon Valley Bank profit squeeze in tech downturn attracts short sellers |work=[[Financial Times]] |url=https://www.ft.com/content/0387e331-61b4-4848-9e50-04775b4c3fa7 |url-access=subscription |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311232621/https://www.ft.com/content/0387e331-61b4-4848-9e50-04775b4c3fa7 |url-status=live }}</ref><ref>{{Cite news |last=Wallerstein |first=Eric |date=March 9, 2023 |title=Short Interest in SVB Financial Was Large as of Last Month |url=https://www.wsj.com/livecoverage/stock-market-news-today-03-09-2023/card/short-interest-in-svb-financial-was-large-as-of-last-month-YwrTIqVpmzS60UGSBpce |access-date=March 11, 2023 |work=[[The Wall Street Journal]] |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311104137/https://www.wsj.com/livecoverage/stock-market-news-today-03-09-2023/card/short-interest-in-svb-financial-was-large-as-of-last-month-YwrTIqVpmzS60UGSBpce |url-status=live }}</ref> Employees received their annual bonuses on March 10, 2023, hours before the government took control of the company.<ref>{{Cite news |last=Hagstrom |first=Anders |date=March 12, 2023 |title=Silicon Valley Bank gave company-wide bonuses hours before it collapsed: report |work=[[Fox Business]] |url=https://www.foxbusiness.com/politics/silicon-valley-bank-company-wide-bonuses-hours-before-collapsed-report |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312142117/https://www.foxbusiness.com/politics/silicon-valley-bank-company-wide-bonuses-hours-before-collapsed-report |url-status=live }}</ref> |
| | 19 | |
| | 20 | As of the last [[call report]] of the bank, filed on December 31, 2022, it held $209{{nbsp}}billion in total assets, with $175.5{{nbsp}}billion in total deposits, of which the bank estimated $151.6{{nbsp}}billion (86.4 percent) were uninsured.<ref>{{cite web |date=December 31, 2022 |title=Consolidated Reports of Condition and Income: Silicon Valley Bank |url=https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idtype=id_rssd&id=802866&date=12312022 |website=Central Data Repository |publisher=[[Federal Financial Institutions Examination Council]] |at=Fields RCFD2170, RCFDF236, RCON5597 |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312032019/https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idtype=id_rssd&id=802866&date=12312022 |url-status=live }}</ref> |
| | 21 | |
| | 22 | ==Collapse== |
| | 23 | {{Broader|March 2023 United States bank failures}} |
| | 24 | |
| | 25 | ===Losses=== |
| | 26 | The bank's deposits increased from $62{{nbsp}}billion in March 2020 to $124{{nbsp}}billion in March 2021, benefiting from the [[impact of the COVID-19 pandemic on science and technology]]. Most of these deposits were invested in long-term [[United States Treasury security|Treasury bonds]] as the bank sought a higher [[return on investment]] than was available on shorter-term bonds.<ref name="Chappatta">{{cite news |last1=Chappatta |first1=Brian |date=March 10, 2023 |title=SVB's 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality |url-status=live |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230310225959/https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality |archive-date=March 10, 2023}}</ref> These long-term bonds fell in current market value as [[interest rates]] rose during the [[2021–2023 inflation surge]] and they became less attractive as investments.<ref name="NYTimesBackground">{{Cite news |last=Giang |first=Vivian |date=March 10, 2023 |title=Silicon Valley Bank Collapse: What We Know |url=https://www.nytimes.com/2023/03/10/business/svb-silicon-valley-bank-explainer.html |access-date=March 10, 2023 |work=[[The New York Times]] |archive-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310193337/https://www.nytimes.com/2023/03/10/business/svb-silicon-valley-bank-explainer.html/ |url-status=live }}</ref> In April 2022, SVB's [[chief risk officer]] stepped down, and a successor was not named until January 2023—a period coinciding with the period of interest rate increases.<ref name="Chappatta" /><ref name="Prakash">{{Cite magazine |last=Prakash |first=Prarthana |date=March 10, 2023 |title=Silicon Valley Bank had no official chief risk officer for 8 months while the VC market was spiraling |url=https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/ |magazine=[[Fortune (magazine)|Fortune]] |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312001242/https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/ |url-status=live }}</ref> At the end of 2022, its [[mark-to-market accounting|marked-to-market]] unrealized losses for securities held to maturity exceeded $15{{nbsp}}billion.<ref name="Chappatta" /><ref name="Prakash"/> |
| | 27 | |
| | 28 | At the same time, startup companies withdrew deposits from the bank to fund their operations as private financing became harder to come by.<ref name="Son-2023">{{Cite news |last1=Son |first1=Hough |last2=Goswami |first2=Rohan |last3=Vanian |first3=Jonathan |date=March 10, 2023 |title=Here's how the second-biggest bank collapse in U.S. history happened in just 48 hours |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/10/silicon-valley-bank-collapse-how-it-happened.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310222305/https://www.cnbc.com/2023/03/10/silicon-valley-bank-collapse-how-it-happened.html |archive-date=March 10, 2023}}</ref> A series of layoffs in the technology sector that began in 2022 also caused depositors to draw down their savings.<ref name="CalMatters Christopher">{{cite news |last=Christopher |first=Ben |date=March 13, 2023 |title=The collapse of Silicon Valley Bank: A one-off calamity, or sign of more trouble for California? |work=CalMatters |location=Sacramento, California |url=https://calmatters.org/economy/2023/03/silicon-valley-bank-collapse/ |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313182447/https://calmatters.org/economy/2023/03/silicon-valley-bank-collapse/ |url-status=live }}</ref> To raise needed cash to fund the withdrawals, the bank sold all of its available-for-sale securities, realizing a $1.8{{nbsp}}billion loss.<ref name="Son-2023" /> The bank was criticized for timing its announcement shortly after [[Silvergate Bank]], which catered to [[cryptocurrency]] users, started winding down its operations,<ref name="NYT Yaffe-Bellany" /> and for not lining up private funding ahead of the announcement.<ref>{{cite news |last=Egan |first=Matt |date=March 13, 2023 |title='Absolutely idiotic'. SVB insider says employees are angry with CEO |work=[[KXLY-TV]] |agency=[[CNN]] |location=Spokane, Washington |url=https://www.kxly.com/news/money/absolutely-idiotic-svb-insider-says-employees-are-angry-with-ceo/article_fbe9ddcf-fa78-5c6b-981e-925c1173cbc7.html |accessdate=March 13, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314035748/https://www.kxly.com/news/money/absolutely-idiotic-svb-insider-says-employees-are-angry-with-ceo/article_fbe9ddcf-fa78-5c6b-981e-925c1173cbc7.html |url-status=live }}</ref> |
| | 29 | |
| | 30 | Some banking experts said that the bank would have managed its risks better had it not been for the [[Economic Growth, Regulatory Relief, and Consumer Protection Act]] (EGRRCPA), enacted in 2018 and supported by SVB CEO [[Gregory W. Becker|Greg Becker]], which reduced the frequency and number of scenarios of required [[Stress test (financial)|stress testing]] implemented under the [[Dodd–Frank Wall Street Reform and Consumer Protection Act]] for banks with under $250{{nbsp}}billion in assets.<ref>{{Cite news |last1=Flitter |first1=Emily |last2=Copeland |first2=Rob |title=Silicon Valley Bank Fails After Run on Deposits |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html |date=March 10, 2023 |url-access=limited |issn=0362-4331 |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311061504/https://www.nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html |url-status=live }}</ref> The [[Federal Reserve Bank of San Francisco]] did have discretion to annually examine any bank with $100 billion in assets.<ref name="NYT Weisman">{{cite news |last1=Weisman |first1=Jonathan |last2=Thompson |first2=Stuart A. |date=March 14, 2023 |title=The Political Finger-Pointing Behind Bank Collapses and Train Derailments |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/14/us/politics/bank-collapse-train-derailment.html |accessdate=March 15, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314232148/https://www.nytimes.com/2023/03/14/us/politics/bank-collapse-train-derailment.html |url-status=live }}</ref> |
| | 31 | |
| | 32 | ===Instability=== |
| | 33 | In the week before the collapse, [[Moody's Investors Service]] reportedly informed SVB Financial, the bank's holding company, that it was facing a potential double-downgrade of its [[credit rating]] because of its unrealized losses.<ref name="Chappatta" /> On March 8, 2023, SVB announced it had sold over $21{{nbsp}}billion worth of its investments, borrowed $15{{nbsp}}billion, and would hold an emergency sale of its stock to raise $2.25{{nbsp}}billion, including $500 million to [[General Atlantic]].<ref name="Chappatta" /> [[JPMorgan Chase]] and [[Bank of America]] turned down opportunities to acquire the bank.<ref>{{cite news|title=Shards of Silicon Valley Bank Are for Sale, but No One Is Buying Yet|first1=Rob|last1=Copeland|first2=Maureen|last2=Farrell|work=[[The New York Times]]|location=New York City|date=March 15, 2023|accessdate=March 15, 2023|url=https://www.nytimes.com/2023/03/15/business/silicon-valley-bank-auction.html|archive-date=March 15, 2023|archive-url=https://web.archive.org/web/20230315215005/https://www.nytimes.com/2023/03/15/business/silicon-valley-bank-auction.html|url-status=live}}</ref> Despite the steps taken by the bank, Moody's downgraded SVB on March 8.<ref name="Chappatta" /><ref>{{cite press release |last1=Fox |first1=Megan |last2=Cetina |first2=Jill |title=Moody's downgrades SVB Financial (senior unsecured to Baa1 from A3); outlook negative |url=https://www.moodys.com/research/Moodys-downgrades-SVB-Financial-senior-unsecured-to-Baa1-from-A3--PR_474590 |date=March 8, 2023 |location=New York |publisher=[[Moody's Investors Service]] |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311024627/https://www.moodys.com/research/Moodys-downgrades-SVB-Financial-senior-unsecured-to-Baa1-from-A3--PR_474590 |url-status=live }}</ref> |
| | 34 | |
| | 35 | Investors at several [[venture capital]] firms, including executives at [[Peter Thiel]]'s [[Founders Fund]],<ref>{{Cite news |last1=Roof |first1=Katie |last2=Tan |first2=Gillian |date=March 9, 2023 |title=Peter Thiel's Founders Fund Advises Companies to Withdraw Money From SVB |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-09/founders-fund-advises-companies-to-withdraw-money-from-svb |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230309223412/https://www.bloomberg.com/news/articles/2023-03-09/founders-fund-advises-companies-to-withdraw-money-from-svb |archive-date=March 9, 2023}}</ref> urged their [[portfolio companies]] to withdraw their deposits from the bank.<ref>{{cite news |last=Miller |first=Hannah |date=March 10, 2023 |title=SVB Races to Prevent a Bank Run as Funds Advise Pulling Cash |work=[[Bloomberg Law]] |url=https://news.bloomberglaw.com/tech-and-telecom-law/svb-ceo-becker-asks-silicon-valley-bank-clients-to-stay-calm |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310190215/https://news.bloomberglaw.com/tech-and-telecom-law/svb-ceo-becker-asks-silicon-valley-bank-clients-to-stay-calm |archive-date=March 10, 2023}}</ref> By the close of business on March 9, customers had withdrawn $42{{nbsp}}billion, leaving the bank with a negative cash balance of about $958{{nbsp}}million.<ref name="DFPI order">{{cite web |last=Hewlett |first=Clothilde V. |date=March 10, 2023 |title=In re Silicon Valley Bank: Order taking possession of property and business |url=https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFPI-Orders-Silicon-Valley-Bank-03102023.pdf |url-status=live |archive-url=https://web.archive.org/web/20230310222622/https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFPI-Orders-Silicon-Valley-Bank-03102023.pdf |archive-date=March 10, 2023 |access-date=March 10, 2023 |publisher=[[California Department of Financial Protection and Innovation]] }}</ref> Among the financial services companies receiving money from SVB customers were [[Brex]], JPMorgan Chase, [[Morgan Stanley]] and [[First Republic Bank]].<ref>{{Cite news |last=Son |first=Hugh |date=March 10, 2023 |title=Fintech startup Brex got billions of dollars in Silicon Valley Bank deposits Thursday, source says |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/10/fintech-brex-got-billions-of-dollars-in-silicon-valley-bank-deposits-thursday.html |access-date=March 12, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311165155/https://www.cnbc.com/2023/03/10/fintech-brex-got-billions-of-dollars-in-silicon-valley-bank-deposits-thursday.html |url-status=live }}</ref> Venture capital funds including [[Founders Fund]], [[Union Square Ventures]] and [[Coatue Management]] had encouraged companies in their portfolios to avoid ramifications from SVB's collapse by withdrawing their money,<ref>{{Cite news |last1=Browne |first1=Ryan |last2=Son |first2=Hugh |title=Venture capitalists urge startups to withdraw funds from crisis-laden Silicon Valley Bank |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/10/vcs-urge-startups-to-withdraw-funds-from-silicon-valley-bank.html |access-date=March 12, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311213502/https://www.cnbc.com/2023/03/10/vcs-urge-startups-to-withdraw-funds-from-silicon-valley-bank.html |url-status=live }}</ref> and Founders Fund withdrew all of its funds from the bank by the morning of March 9.<ref>{{Cite news |title=Peter Thiel's Founders Fund got its cash out of Silicon Valley Bank before it was shut down, report says |url=https://www.businessinsider.com/peter-thiel-founders-fund-pulled-cash-svb-before-collapse-report-2023-3?op=1 |last=Hogg |first=Ryan |date=March 11, 2023 |access-date=March 12, 2023 |work=[[Business Insider]] |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312224456/https://www.businessinsider.com/peter-thiel-founders-fund-pulled-cash-svb-before-collapse-report-2023-3?op=1 |url-status=live }}</ref> The value of SVB's shares plummeted until a [[trading halt]] was implemented on the morning of March 10.<ref>{{Cite news |last=Pound |first=Jesse |date=March 10, 2023 |title=Shares of SVB Financial fall 60% as tech-focused bank looks to raise more cash |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/09/svb-financial-falls-more-than-50percent-as-tech-bank-looks-to-raise-more-cash.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230309221441/https://www.cnbc.com/2023/03/09/svb-financial-falls-more-than-50percent-as-tech-bank-looks-to-raise-more-cash.html |archive-date=March 9, 2023}}</ref><ref>{{cite news |last1=Hu |first1=Krystal |last2=Tong |first2=Anna |last3=Rajesh |first3=Ananya Mariam |date=March 10, 2023 |title=Silicon Valley Bank shares plunge on stock-sale plan to stem cash burn |work=[[Reuters]] |url=https://www.reuters.com/business/finance/silicon-valley-bank-sell-stock-cope-with-cash-burn-2023-03-09/ |url-status=live |access-date=March 9, 2023 |archive-url=https://web.archive.org/web/20230309154955/https://www.reuters.com/business/finance/silicon-valley-bank-sell-stock-cope-with-cash-burn-2023-03-09/ |archive-date=March 9, 2023}}</ref><ref name="NYTimesInstability2">{{Cite news |last1=Griffith |first1=Erin |last2=Copeland |first2=Rob |date=March 8, 2023 |title=Silicon Valley Bank's Financial Stability Worries Investors |url=https://www.nytimes.com/2023/03/09/business/silicon-valley-bank-investors-worry.html |access-date=March 10, 2023 |work=[[The New York Times]] |archive-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310020300/https://www.nytimes.com/2023/03/09/business/silicon-valley-bank-investors-worry.html/ |url-status=live }}</ref><ref>{{cite news |last1=Rees |first1=Kit |last2=Turner |first2=Matt |date=March 10, 2023 |title=SVB Shares Halted for Pending News After Sinking Another 69% |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-10/svb-financial-sivb-slumps-again-as-clients-threaten-to-pull-cash?srnd=premium&sref=CIpmV6x8 |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310190252/https://www.bloomberg.com/news/articles/2023-03-10/svb-financial-sivb-slumps-again-as-clients-threaten-to-pull-cash?srnd=premium&sref=CIpmV6x8 |archive-date=March 10, 2023}}</ref><ref>{{cite news |date=March 10, 2023 |title=SVB in talks to sell itself; shares halted after tumbling 66% in premarket trading |work=[[The Economic Times]] |publisher=[[The Times of India]] |agency=[[Reuters]] |url=https://economictimes.indiatimes.com/markets/stocks/news/svb-in-talks-to-sell-itself-as-crisis-triggers-global-banking-rout/articleshow/98547972.cms |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310190240/https://economictimes.indiatimes.com/markets/stocks/news/svb-in-talks-to-sell-itself-as-crisis-triggers-global-banking-rout/articleshow/98547972.cms |archive-date=March 10, 2023 }}</ref> |
| | 36 | |
| | 37 | On February 27, SVB Financial Group CEO Greg Becker sold 12,451 shares of company stock, worth $3.6{{nbsp}}million, through an executive trading plan that he filed with the SEC under [[SEC Rule 10b5-1|Rule 10b5-1]] on January 26. The rule has been criticized as a loophole allowing for [[insider trading]]. Beginning April 1, the SEC will require a minimum 90-day cooling period for most executive trading plans.<ref>{{cite news |last=Weinstein |first=Austin |date=March 10, 2023 |title=Silicon Valley Bank CEO sold $3.6{{nbsp}}million in stock days before the bank's failure |work=[[SiliconValley.com]] |agency=[[Bloomberg News]] |url=https://www.siliconvalley.com/2023/03/10/svb-chief-sold-3-6-million-in-stock-days-before-banks-failure/ |url-status=live |accessdate=March 11, 2023 |archive-url=https://web.archive.org/web/20230311012257/https://www.siliconvalley.com/2023/03/10/svb-chief-sold-3-6-million-in-stock-days-before-banks-failure/ |archive-date=March 11, 2023}}</ref> |
| | 38 | |
| | 39 | ===Receivership=== |
| | 40 | [[File:Deposit Insurance National Bank of Santa Clara logo.svg|thumb|alt=The logo of the Deposit Insurance National Bank of Santa Clara. Two horizontal lines are on the top and bottom of the logo. The letters 'DINB' are large, and 'of Santa Clara' are below it in a smaller font.|The FDIC temporarily created the Deposit Insurance National Bank of Santa Clara (DINB) to distribute insured deposits until replacing it with a bridge bank.]] |
| | 41 | |
| | 42 | On the morning of March 10, examiners from the [[Federal Reserve]] and the [[Federal Deposit Insurance Corporation]] (FDIC) arrived at the offices of SVB to assess the company's finances.<ref>{{Cite news |last1=Beyoud |first1=Lydia |last2=Johnson |first2=Katanga |date=March 10, 2023 |title=US Regulators Descend on Silicon Valley Bank to Assess Its Finances |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-10/us-regulators-descend-on-silicon-valley-bank-to-assess-finances |url-access=subscription |access-date=March 10, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311201907/https://www.bloomberg.com/tosv2.html?vid=&uuid=f9c4b91b-c049-11ed-8ae8-4261626f5252&url=L25ld3MvYXJ0aWNsZXMvMjAyMy0wMy0xMC91cy1yZWd1bGF0b3JzLWRlc2NlbmQtb24tc2lsaWNvbi12YWxsZXktYmFuay10by1hc3Nlc3MtZmluYW5jZXM= |url-status=live }}</ref> Several hours later, the [[California Department of Financial Protection and Innovation]] issued an order taking possession of SVB,<ref name="DFPI order"/> citing inadequate liquidity and insolvency,<ref name="blaw-pollard" /> and appointed the FDIC as receiver.<ref name="DFPI PR">{{cite press release |location=San Francisco |publisher=[[California Department of Financial Protection and Innovation]] |date=March 10, 2023 |title=California Financial Regulator Takes Possession of Silicon Valley Bank |url=https://dfpi.ca.gov/2023/03/10/california-financial-regulator-takes-possession-of-silicon-valley-bank/ |access-date=March 10, 2023 |last1=Smith |first1=Elizabeth |archive-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310165147/https://dfpi.ca.gov/2023/03/10/california-financial-regulator-takes-possession-of-silicon-valley-bank/ |url-status=live }}</ref><ref name="CNNInfo">{{Cite news |last1=Morrow |first1=Allison |last2=Egan |first2=Matt |date=March 10, 2023 |title=Silicon Valley Bank collapses after failing to raise capital |work=[[CNN]] |url=https://www.cnn.com/2023/03/10/investing/svb-bank/index.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310144613/https://www.cnn.com/2023/03/10/investing/svb-bank/index.html |archive-date=March 10, 2023}}</ref> The FDIC then established the Deposit Insurance National Bank of Santa Clara (DINB) to re-open the bank's branches the following Monday and enable access to insured deposits,<ref name="FDIC_public_notice" /><ref>{{Cite news |last=Pound |first=Jesse |date=March 10, 2023 |title=Silicon Valley Bank is shut down by regulators, FDIC to protect insured deposits |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310164812/https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html |archive-date=March 10, 2023}}</ref><ref>{{cite news |last1=Levin |first1=Benjamin |date=March 9, 2023 |title=Silicon Valley Bank Fails as FDIC Takes Over, Appoints Receiver |work=[[Bloomberg Law]] |url=https://news.bloomberglaw.com/bankruptcy-law/silicon-valley-bank-fails-as-fdic-takes-over-appoints-receiver |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310190248/https://news.bloomberglaw.com/bankruptcy-law/silicon-valley-bank-fails-as-fdic-takes-over-appoints-receiver |archive-date=March 10, 2023}}</ref><ref>{{cite news |last1=Ensign |first1=Rachel Louise |last2=Driebusch |first2=Corrie |last3=Bobrowsky |first3=Meghan |date=March 10, 2023 |title=Silicon Valley Bank Closed by Regulators |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/svb-financial-pulls-capital-raise-explores-alternatives-including-possible-sale-sources-say-11de7522 |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310155633/https://www.wsj.com/articles/svb-financial-pulls-capital-raise-explores-alternatives-including-possible-sale-sources-say-11de7522 |archive-date=March 10, 2023 }}</ref> and it opened an auction over the weekend to find a buyer for the failed bank.<ref>{{Cite news |last=Monks |first=Matthew |date=March 12, 2023 |title=FDIC Auction for Failed SVB Underway, Final Bids Due Sunday |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-12/fdic-auction-for-svb-said-to-be-underway-final-bids-due-sunday |url-access=subscription |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312161210/https://www.bloomberg.com/news/articles/2023-03-12/fdic-auction-for-svb-said-to-be-underway-final-bids-due-sunday |url-status=live }}</ref> The failure of SVB was the largest of any bank since the [[financial crisis of 2007–2008]] and the second-largest failure of an FDIC-insured bank by assets.<ref>{{Cite news |last1=Palumbo |first1=Angela |last2=Vanjani |first2=Karishma |last3=English |first3=Carleton |date=March 9, 2023 |title=Silicon Valley Bank Shut Down, Biggest Bank to Fail Since Financial Crisis |work=[[MarketWatch]] |url=https://www.marketwatch.com/articles/svb-financial-stock-portfolio-outlook-loss-93287f3d |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310231709/https://www.marketwatch.com/articles/svb-financial-stock-portfolio-outlook-loss-93287f3d |archive-date=March 10, 2023}}</ref> The size and complexity of SVB's loans influenced the FDIC's initial decision to establish a DINB.<ref name="FT Franklin">{{cite news|title=Uninsured Silicon Valley Bank depositors seek fire sale of assets|first1=Joshua|last1=Franklin|first2=Sujeet|last2=Indap|first3=Colby|last3=Smith|first4=George|last4=Hammond|work=[[Financial Times]]|publisher=London|date=March 11, 2023|accessdate=March 13, 2023|url=https://www.ft.com/content/3c6551ff-9778-4713-afc5-f87ba0bb80dd|archive-date=March 12, 2023|archive-url=https://web.archive.org/web/20230312213826/https://www.ft.com/content/3c6551ff-9778-4713-afc5-f87ba0bb80dd|url-status=live}}</ref> The [[Federal Reserve Bank of San Francisco]] stated that the bank's CEO Greg Becker was no longer on its board of directors.<ref>{{Cite news |last=Derby |first=Michael S. |date=March 11, 2023 |title=CEO of failed Silicon Valley Bank no longer a director at San Francisco Fed |work=[[Reuters]] |url=https://www.reuters.com/markets/us/ceo-failed-silicon-valley-bank-no-longer-director-sf-fed-2023-03-10/ |url-status=live |access-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312012847/https://www.reuters.com/markets/us/ceo-failed-silicon-valley-bank-no-longer-director-sf-fed-2023-03-10/ |archive-date=March 12, 2023}}</ref> |
| | 43 | |
| | 44 | According to regulatory reports as of December 31, 2022, uninsured deposits were estimated to represent 89{{nbsp}}percent of total deposits at the bank;<ref name="reuters_fwj" /> however, Moody's Investor Service reported on March 10 that it expected a recovery rate for uninsured depositors of 80–90 percent.<ref>{{cite press release |last=Fox |first=Megan |display-authors=etal |title=Moody's downgrades SVB Financial Group (senior unsecured to C from Baa1) and will withdraw the ratings |url=https://www.moodys.com/research/Moodys-downgrades-SVB-Financial-Group-senior-unsecured-to-C-from--PR_474735 |date=March 10, 2023 |publisher=[[Moody's Investors Service]] |location=New York |quote=The downgrade of the long-term bank deposit rating to Caa2 reflects an expected recovery rate of 80–90% for uninsured depositors. |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311201907/https://www.moodys.com/research/Moodys-downgrades-SVB-Financial-Group-senior-unsecured-to-C-from--PR_474735 |url-status=live }}</ref> The FDIC said it would begin covering uninsured deposits with special dividends within days as SVB's assets were liquidated.<ref>{{Cite news |last=Pound |first=Jesse |date=March 10, 2023 |title=Silicon Valley Bank is shut down by regulators, FDIC to protect insured deposits |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310164812/https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html |archive-date=March 10, 2023}}</ref> The FDIC notified Silicon Valley Bank employees that they would be let go in 45 days' time; in the meantime, it offered salaried employees a 50% raise and hourly employees double pay for any overtime.<ref>{{cite news |last1=Sage |first1=John |last2=Johnson |first2=Katanga |date=March 11, 2023 |title=Big raise if you stay 45 days |work=[[The Mercury News]] |agency=[[Bloomberg News]] |location=San Jose, California |url=https://www.mercurynews.com/2023/03/11/svbs-new-owner-the-fdic-gives-workers-45-days-of-employment/ |accessdate=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311222853/https://www.mercurynews.com/2023/03/11/svbs-new-owner-the-fdic-gives-workers-45-days-of-employment/ |url-status=live }}</ref> |
| | 45 | |
| | 46 | In an announcement on March 12, the Treasury, Federal Reserve, and FDIC stated that all depositors would be made whole without expenditure of taxpayer money.<ref name="Allyn">{{Cite news |last=Allyn |first=Bobby |date=March 12, 2023 |title=The U.S. takes emergency measures to protect all deposits at Silicon Valley Bank |work=[[NPR]] |url=https://www.npr.org/2023/03/12/1162975615/the-u-s-takes-emergency-measures-to-protect-all-deposits-at-silicon-valley-bank |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312230152/https://www.npr.org/2023/03/12/1162975615/the-u-s-takes-emergency-measures-to-protect-all-deposits-at-silicon-valley-bank |url-status=live }}</ref><ref name="treasury pr 12mar">{{Cite press release |url=https://home.treasury.gov/news/press-releases/jy1337 |date=March 12, 2023 |title=Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC |location=Washington |publisher=[[United States Department of the Treasury]] |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312222324/https://home.treasury.gov/news/press-releases/jy1337 |url-status=live }}</ref><ref>{{Cite news |last1=Smialek |first1=Jeanna |last2=Rappeport |first2=Alan |date=March 12, 2023 |title=Regulators Close Second Bank and Move to Protect Deposits |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/12/business/janet-yellen-silicon-valley-bank.html |access-date=March 12, 2023 |issn=0362-4331 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313005302/https://www.nytimes.com/2023/03/12/business/janet-yellen-silicon-valley-bank.html |url-status=live }}</ref> On March 13, 2023, the FDIC transferred SVB assets to a new [[Bridge bank#United States|bridge bank]], Silicon Valley Bridge Bank, N.A., and appointed [[Tim Mayopoulos]] as CEO.<ref name="pr23019"/><ref>{{cite news |last=Mehnaz |first=Yasmin |date=March 13, 2023 |title=FDIC names Tim Mayopoulos as CEO of Silicon Valley Bank |work=[[Reuters]] |url=https://www.reuters.com/business/finance/fdic-names-tim-mayopoulos-ceo-silicon-valley-bank-2023-03-13/ |access-date=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313123025/https://www.reuters.com/business/finance/fdic-names-tim-mayopoulos-ceo-silicon-valley-bank-2023-03-13/ |url-status=live }}</ref> The bridge bank consolidated insured and uninsured deposits into a single institution, making it more attractive to prospective buyers.<ref name="FT Franklin" /> There is a dispute about whether the U.S. government's guarantee to insure depositors in full, rather than just the $250,000 per account protected by law, qualifies as a bailout. President [[Joe Biden]] denied the term bailout applies in this particular case.<ref>{{Cite web |last=Prokop |first=Andrew |date=2023-03-14 |title=Why bailouts keep happening even though everyone hates them |url=https://www.vox.com/policy/2023/3/14/23639455/silicon-valley-bank-bailout |access-date=2023-03-15 |website=[[Vox (website)|Vox]] |language=en |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314203609/https://www.vox.com/policy/2023/3/14/23639455/silicon-valley-bank-bailout |url-status=live }}</ref> Treasury Secretary [[Janet Yellen]] had already ruled out bailing out SVB.<ref>{{Cite news |last=Megerian |first=Chris |date=March 12, 2023 |title=Yellen: No federal bailout for collapsed Silicon Valley Bank |work=[[Associated Press]] |url=https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312134223/https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e |url-status=live }}</ref> |
| | 47 | |
| | 48 | Silicon Valley Bank's overseas subsidiaries held $13.9 billion in deposits.<ref name="SVBJ Medici">{{cite news|title=Deposit insurance cap may be a 'dead letter' as feds intervene in Silicon Valley Bank, Signature Bank|first=Andy|last=Medici|work=[[Silicon Valley Business Journal]]|publisher=American City Business Journals|location=San Jose, California|date=March 14, 2023|accessdate=March 14, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/13/fdic-deposits-silicon-valley-bank-signature-biden.html|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313223535/https://www.bizjournals.com/sanjose/news/2023/03/13/fdic-deposits-silicon-valley-bank-signature-biden.html|url-status=live}}</ref> The [[Bank of England]] issued a statement that it sought a court order to place the United Kingdom subsidiary of the bank into a Bank Insolvency Procedure.<ref>{{Cite news |last1=Smiejkowska |first1=Maja |date=March 11, 2023 |title=Bank of England seeks to wind up Silicon Valley Bank's UK arm |work=[[Reuters]] |url=https://www.reuters.com/business/finance/bank-england-puts-uk-arm-silicon-valley-bank-into-resolution-ft-2023-03-10/ |url-status=live |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311040942/https://www.reuters.com/business/finance/bank-england-puts-uk-arm-silicon-valley-bank-into-resolution-ft-2023-03-10/ |archive-date=March 11, 2023}}</ref><ref>{{cite press release |title=Bank of England statement: Silicon Valley Bank UK |url=https://www.bankofengland.co.uk/news/2023/march/boe-statement-silicon-valley-bank-uk |publisher=[[Bank of England]] |date=March 10, 2023 |access-date=March 10, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311130551/https://www.bankofengland.co.uk/news/2023/march/boe-statement-silicon-valley-bank-uk |url-status=live }}</ref> [[Shanghai Pudong Development Bank]] issued a statement that its joint operations with SVB, chaired by its own Shanghai-based chairman, were not affected by the collapse as of March 11.<ref>{{Cite news |author=<!-- none --> |date=March 10, 2023 |title=SVB's China Partner Urges Calm, Says Business Not Affected |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-03-10/svb-s-china-partner-urges-calm-says-business-not-affected |url-status=live |url-access=subscription |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230311042855/https://www.bloomberg.com/news/articles/2023-03-10/svb-s-china-partner-urges-calm-says-business-not-affected |archive-date=March 11, 2023}}</ref><ref name=":0">{{Cite news |title=Silicon Valley Bank's China venture says operations 'sound' |url=https://asia.nikkei.com/Business/Finance/Silicon-Valley-Bank-s-China-venture-says-operations-sound |last=Kawase |first=Kenji |date=March 11, 2023 |access-date=March 12, 2023 |work=[[The Nikkei]] |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312054741/https://asia.nikkei.com/Business/Finance/Silicon-Valley-Bank-s-China-venture-says-operations-sound |url-status=live }}</ref> On March 13, 2023, after a bidding process, it was announced that [[HSBC (United Kingdom)|HSBC UK]] had agreed to acquire Silicon Valley Bank UK for £1 in a rescue deal, at no cost to taxpayers and with depositors fully protected.<ref>{{Cite news |last=Makortoff |first=Kalyeena |date=2023-03-13 |title=HSBC to buy Silicon Valley Bank UK for £1 in rescue deal |language=en-GB |work=[[The Guardian]] |url=https://www.theguardian.com/business/2023/mar/13/hsbc-buy-silicon-valley-banks-uk-tech-startups |access-date=2023-03-13 |issn=0261-3077 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313100912/https://www.theguardian.com/business/2023/mar/13/hsbc-buy-silicon-valley-banks-uk-tech-startups |url-status=live }}</ref><ref>{{cite news|url=https://www.bbc.co.uk/news/business-64937251|work=[[BBC News]]|last=Race|date=13 March 2023|access-date=13 March 2023|first=Michael|title=HSBC swoops in to rescue UK arm of Silicon Valley Bank|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313105316/https://www.bbc.co.uk/news/business-64937251|url-status=live}}</ref><ref>{{Cite news |last1=Makortoff |first1=Kalyeena |last2=Elliott |first2=Larry |date=2023-03-13 |title='It was frantic': the scramble to save SVB UK and avert a banking crisis |language=en-GB |work=[[The Guardian]] |url=https://www.theguardian.com/business/2023/mar/13/it-was-frantic-the-two-day-scramble-to-save-svb-and-avert-a-banking-crisis |access-date=2023-03-14 |issn=0261-3077 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314003429/https://www.theguardian.com/business/2023/mar/13/it-was-frantic-the-two-day-scramble-to-save-svb-and-avert-a-banking-crisis |url-status=live }}</ref> Canadian regulator [[Office of the Superintendent of Financial Institutions]] seized the assets of SVB's Toronto branch on March 12.<ref>{{Cite web |date=2023-03-12 |title=Canadian regulator seizes assets of Toronto branch of Silicon Valley Bank |url=https://www.ctvnews.ca/business/canadian-regulator-seizes-assets-of-toronto-branch-of-silicon-valley-bank-1.6310275 |access-date=2023-03-13 |website=[[CTVNews]] |language=en |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313120724/https://www.ctvnews.ca/business/canadian-regulator-seizes-assets-of-toronto-branch-of-silicon-valley-bank-1.6310275 |url-status=live }}</ref> |
| | 49 | |
| | 50 | An initial auction of Silicon Valley Bank assets on March 12 attracted a single bid that was not from a bank,<ref name="SFBT Gardner">{{cite news|title=FDIC plans to hold a second auction for Silicon Valley Bank, U.S. senators told|first=Jim|last=Gardner|work=[[San Francisco Business Times]]|publisher=American City Business Journals|location=San Francisco|date=March 13, 2023|accessdate=March 13, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/13/fdic-second-auction-silicon-valley-bank.html|archive-date=March 14, 2023|archive-url=https://web.archive.org/web/20230314152912/https://www.bizjournals.com/sanjose/news/2023/03/13/fdic-second-auction-silicon-valley-bank.html|url-status=live}}</ref><ref name="SVBJ Schubarth questions">{{cite news|title=Questions swirl around Silicon Valley Bank sale ahead of Friday auction deadline|first=Cromwell|last=Schubarth|work=[[Silicon Valley Business Journal]]|publisher=American City Business Journals|location=San Jose, California|date=March 16, 2023|accessdate=March 16, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/16/questions-ahead-of-latest-svb-auction-deadline.html}}</ref> after [[PNC Financial Services]] and [[RBC Bank]] backed away from making offers.<ref>{{cite news |last=Davies |first=Megan |last2=Sen |first2=Anirban |last3=French |first3=David |last4=Schroeder |first4=Peter |last5=Nguyen |first5=Lananh |date=March 13, 2023 |title=Exclusive: PNC, RBC interest in SVB cools as regulators seek bids |work=[[Reuters]] |location=London |url=https://www.reuters.com/business/finance/pnc-rbc-interest-svb-cools-regulators-seek-rescue-bids-sources-2023-03-12/ |accessdate=March 15, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314191005/https://www.reuters.com/business/finance/pnc-rbc-interest-svb-cools-regulators-seek-rescue-bids-sources-2023-03-12/ |url-status=live }}</ref><ref>{{cite news |last1=Rappeport |first1=Alan |author-link=Alan Rappeport |last2=Hirsch |first2=Lauren |last3=Smialek |first3=Jeanna |last4=Tankersley |first4=Jim |date=March 14, 2023 |title=How Washington Decided to Rescue Silicon Valley Bank |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/14/us/politics/inside-silicon-valley-bank-rescue.html |accessdate=March 15, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314233227/https://www.nytimes.com/2023/03/14/us/politics/inside-silicon-valley-bank-rescue.html/ |url-status=live }}</ref> Bank of America, JPMorgan Chase, and [[Goldman Sachs]] all declined to make offers.<ref name="SVBJ Schubarth questions" /> The FDIC rejected the lone bid and plans to hold a second auction to attract bids from major banks, now that the bank's [[systemic risk]] designation allows the FDIC to insure all deposits.<ref name="SFBT Gardner" /> The bank's loan portfolio, which Moody's recently rated as conservative and high-performing, was not a factor in the collapse and is considered to be an attractive asset. Private equity firms including [[Apollo Global Management]], [[Blackstone Inc.]], and [[Kohlberg Kravis Roberts]] are considering a purchase of the bank's loans.<ref>{{cite news|title=Apollo, Blackstone and KKR eye purchase of Silicon Valley Bank's loans|first=Cromwell|last=Schubarth|work=[[Silicon Valley Business Journal]]|publisher=American City Business Journals|location=San Jose, California|date=March 14, 2023|accessdate=March 14, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/14/private-equity-firms-eye-svb-loans.html|archive-date=March 14, 2023|archive-url=https://web.archive.org/web/20230314143954/https://www.bizjournals.com/sanjose/news/2023/03/14/private-equity-firms-eye-svb-loans.html|url-status=live}}</ref> The FDIC is giving traditional banks an advantage over private equity firms by limiting examinations of the bank's financials to institutions that hold a bank charter.<ref name="SVBJ Schubarth questions" /> |
| | 51 | |
| | 52 | In the meantime, Mayopoulos urged venture capitalists and startups to keep their deposits in the bridge bank, apparently to improve the bank's financial condition. He suggested that customers return some of the deposits they had recently pulled out of the bank, as part of a diversification strategy.<ref>{{cite news |last=Calvey |first=Mark |date=March 14, 2023 |title=Silicon Valley Bank's new CEO calls on customers to bring deposits back to bank |work=[[San Francisco Business Times]] |publisher=[[American City Business Journals]] |location=San Francisco |url=https://www.bizjournals.com/sanjose/news/2023/03/14/silicon-valley-bank-s-new-ceo-bring-back-deposits.html |accessdate=March 15, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314191733/https://www.bizjournals.com/sanjose/news/2023/03/14/silicon-valley-bank-s-new-ceo-bring-back-deposits.html |url-status=live }}</ref> A group of venture capitalists called for depositors to keep at least half of their capital in the bank.<ref>{{cite news|title=VC group calls for return to Silicon Valley Bank amid FDIC control|first=Cromwell|last=Schubarth|work=[[San Francisco Business Times]]|publisher=American City Business Journals|location=San Francisco|date=March 15, 2023|accessdate=March 15, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/15/vc-group-calls-for-return-to-silicon-valley-bank.html|archive-date=March 15, 2023|archive-url=https://web.archive.org/web/20230315143133/https://www.bizjournals.com/sanjose/news/2023/03/15/vc-group-calls-for-return-to-silicon-valley-bank.html|url-status=live}}</ref> |
| | 53 | |
| | 54 | On March 13, [[SVB Financial Group]] began exploring a potential sale of the bank's sister companies [[SVB Capital]] and [[SVB Securities]]. The latter's founder, Jeffrey Leerink, has expressed interest in buying back the firm.<ref>{{cite news |last=Schubarth |first=Cromwell |date=March 13, 2023 |title=After Silicon Valley Bank's collapse, parent company SVB is looking at selling itself and its other units |work=[[Silicon Valley Business Journal]] |publisher=[[American City Business Journals]] |location=San Jose, California |url=https://www.bizjournals.com/sanjose/news/2023/03/13/silicon-valley-bank-parent-weighs-sale-of-units.html |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313211828/https://www.bizjournals.com/sanjose/news/2023/03/13/silicon-valley-bank-parent-weighs-sale-of-units.html |url-status=live }}</ref> However, the finances of these companies are deeply intertwined with Silicon Valley Bank, which could complicate any sale.<ref name="SVBJ Schubarth questions" /> |
| | 55 | |
| | 56 | ==Effects== |
| | 57 | Experts said that SVB's collapse was unlikely to pose a [[systemic risk]] to the U.S. financial system.<ref>{{Cite magazine |last=Daniel |first=Will |date=March 10, 2023 |title=SVB's collapse could lead to 'contagion' among regional banks—but experts say it's not a systemic risk to the entire financial system |url=https://fortune.com/2023/03/10/silicon-valey-bank-collapse-contagion-regional-banks-and-venture-capital-not-financial-system/ |magazine=[[Fortune (magazine)|Fortune]] |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311002619/https://fortune.com/2023/03/10/silicon-valey-bank-collapse-contagion-regional-banks-and-venture-capital-not-financial-system/ |url-status=live }}</ref> However, although experts think these effects are temporary, the bank's collapse created hardships among some tech startups, and companies holding significant uninsured deposits and low cash flow faced significant risks.<ref name="NYT Yaffe-Bellany">{{Cite news |last1=Yaffe-Bellany |first1=David |last2=Griffith |first2=Erin |last3=Isaac |first3=Mike |date=March 11, 2023 |title=Silicon Valley Bank Collapse Sets Off Blame Game in Tech Industry |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/11/technology/silicon-valley-bank-crypto-investing.html |url-status=live |url-access=registration |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311194305/https://www.nytimes.com/2023/03/11/technology/silicon-valley-bank-crypto-investing.html |archive-date=March 11, 2023 |issn=0362-4331 }}</ref><ref name="CNNStartups">{{Cite news |last=Thorbecke |first=Catherine |date=March 10, 2023 |title=Silicon Valley Bank collapse sends tech startups scrambling |work=[[CNN]] |url=https://www.cnn.com/2023/03/10/tech/silicon-valley-bank-tech-panic/index.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230311105558/https://www.cnn.com/2023/03/10/tech/silicon-valley-bank-tech-panic/index.html |archive-date=March 11, 2023}}</ref><ref name="Griffith">{{Cite news |last=Griffith |first=Erin |date=March 10, 2023 |title=Silicon Valley Bank's Collapse Causes Start-Up Chaos |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/10/technology/silicon-valley-bank-fallout.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310231005/https://www.nytimes.com/2023/03/10/technology/silicon-valley-bank-fallout.html |archive-date=March 10, 2023 |issn=0362-4331 }}</ref><ref>{{Cite web |last=Allyn |first=Bobby |date=2023-03-11 |title=Silicon Valley Bank failure could wipe out 'a whole generation of startups' |url=https://www.npr.org/2023/03/11/1162805718/silicon-valley-bank-failure-startups |url-status=live |access-date=2023-03-13 |website=[[NPR]] |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313144756/https://www.npr.org/2023/03/11/1162805718/silicon-valley-bank-failure-startups }}</ref> |
| | 58 | |
| | 59 | ===Customers=== |
| | 60 | Many [[startups]] were unable to retrieve money, resulting in companies taking out loans to make [[payroll]].<ref name="Griffith" /><ref>{{Cite news |last1=Jin |first1=Berber |last2=Bindley |first2=Katherine |last3=Wonkler |first3=Rolfe |date=March 11, 2023 |title=After Silicon Valley Bank Fails, Tech Startups Race to Meet Payroll |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/after-silicon-valley-bank-fails-tech-startups-race-to-meet-payroll-4ebd9c5c |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311000518/https://www.wsj.com/articles/after-silicon-valley-bank-fails-tech-startups-race-to-meet-payroll-4ebd9c5c |url-status=live }}</ref> Because California state law requires employees to be paid within a certain number of days,<ref name="WaPo Stein" /><ref>{{CalLab|204|}}</ref> continued inability to access deposits may cause a large number of startups to [[furlough]] workers, reduce their workforce through [[layoff]]s, or shut down entirely.<ref>{{Cite news |last1=Stein |first1=Jeff |last2=Romm |first2=Tony |date=March 11, 2023 |title=Bailout talk roils Washington after Silicon Valley Bank's collapse |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/us-policy/2023/03/11/silicon-valley-bank-bailout-washington/ |access-date=March 11, 2023 |issn=0190-8286 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311225158/https://www.washingtonpost.com/us-policy/2023/03/11/silicon-valley-bank-bailout-washington/ |url-status=live }}</ref> The bank's collapse also reduces available funding for startups on the [[venture debt]] market, which has grown in importance as venture capital firms have dramatically scaled back their investments.<ref>{{cite news|title=An 'extinction level event': Founders and funders are filled with fear and frustration after SVB's collapse|first=Troy|last=Wolverton|work=[[Silicon Valley Business Journal]]|publisher=American City Business Journals|location=San Jose, California|date=March 10, 2023|accessdate=March 11, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/10/founders-funders-filled-with-fear-after-svb-bust.html|archive-date=March 12, 2023|archive-url=https://web.archive.org/web/20230312211556/https://www.bizjournals.com/sanjose/news/2023/03/10/founders-funders-filled-with-fear-after-svb-bust.html|url-status=live}}</ref> E-commerce company [[Etsy]] was forced to delay seller payouts; the company used SVB to send out deposits to some sellers.<ref>{{Cite news |url=https://www.theverge.com/2023/3/12/23636379/etsy-delaying-seller-payouts-silicon-valley-bank-collapse |title=Etsy is delaying seller payouts following Silicon Valley Bank's collapse |date=March 12, 2023 |last=Roth |first=Emma |work=[[The Verge]] |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312211614/https://www.theverge.com/2023/3/12/23636379/etsy-delaying-seller-payouts-silicon-valley-bank-collapse |url-status=live }}</ref> The bank's collapse coincided with the beginning of the annual, startup-oriented [[South by Southwest Interactive]] conference in [[Austin, Texas]]. Aside from some disruption caused by SVB credit cards, attendees maintained an air of calm during the event.<ref>{{cite news|title=At SXSW, tech employees react to Silicon Valley Bank's failure|first1=Madeline|last1=Renbarger|first2=Sydney|last2=Bradley|work=[[Business Insider]]|location=New York City|date=March 12, 2023|accessdate=March 12, 2023|url=https://www.businessinsider.com/at-sxsw-tech-employees-react-to-silicon-valley-bank-failure-2023-3|archive-date=March 12, 2023|archive-url=https://web.archive.org/web/20230312010452/http://www.businessinsider.com/at-sxsw-tech-employees-react-to-silicon-valley-bank-failure-2023-3|url-status=live}}</ref> In the days after the collapse, startup founders and other customers lined up outside bank branches in Silicon Valley and San Francisco, seeking to withdraw their deposits or learn the status of their wire transfers.<ref>{{cite news|title=Founders swarmed SVB's Bay Area branches looking for answers after bank's historic failure|first1=Jennifer|last1=Elias|first2=Rebecca|last2=Smith|work=[[CNBC]]|date=March 11, 2023|accessdate=March 13, 2023|url=https://www.cnbc.com/2023/03/11/founders-swarmed-svbs-branches-looking-for-answers-after-bank-failure.html|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313011623/https://www.cnbc.com/2023/03/11/founders-swarmed-svbs-branches-looking-for-answers-after-bank-failure.html|url-status=live}}</ref><ref>{{cite news|title=Dozens line up to pull money from Silicon Valley Bank|first=Joseph|last=Geha|work=San José Spotlight|location=San Jose, California|date=March 13, 2023|accessdate=March 13, 2023|url=https://sanjosespotlight.com/dozens-line-up-to-pull-money-from-silicon-valley-bank-svb/|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313204210/https://sanjosespotlight.com/dozens-line-up-to-pull-money-from-silicon-valley-bank-svb/|url-status=live}}</ref> Many technology entrepreneurs regained access to their deposits on March 13.<ref name=":1" /> |
| | 61 | |
| | 62 | In a [[Securities and Exchange Commission]] (SEC) filing, streaming media company [[Roku, Inc.]] revealed that around a quarter of the company's cash reserves—$487{{nbsp}}million—were held by SVB.<ref name="CNBCRoku">{{Cite news |last=Goswami |first=Rohan |date=March 10, 2023 |title=Roku says 26% of its cash reserves are stuck in Silicon Valley Bank |work=[[CNBC]] |url=https://www.cnbc.com/2023/03/10/roku-says-26percent-cash-reserves-stuck-in-silicon-valley-bank.html |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230310225152/https://www.cnbc.com/2023/03/10/roku-says-26percent-cash-reserves-stuck-in-silicon-valley-bank.html |archive-date=March 10, 2023}}</ref> Other companies affected by the collapse include video game developer [[Roblox Corporation]], video hosting service [[Vimeo]],<ref>{{Cite news |last=Weprin |first=Alex |date=March 10, 2023 |title=Roku Has $487M in Cash at Failed Silicon Valley Bank |work=[[The Hollywood Reporter]] |url=https://www.hollywoodreporter.com/business/business-news/roku-roblox-silicon-valley-bank-1235348133/ |access-date=March 10, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311024559/https://www.hollywoodreporter.com/business/business-news/roku-roblox-silicon-valley-bank-1235348133/ |url-status=live }}</ref> and payroll processor [[Rippling (company)|Rippling]].<ref>{{cite news|title=Silicon Valley Bank collapses after failing to raise capital|first=George|last=Avalos|work=[[The Mercury News]]|location=San Jose, California|date=March 10, 2023|accessdate=March 11, 2023|url=https://www.mercurynews.com/2023/03/10/silicon-valley-bank-collapses-after-failing-to-raise-capital/|archive-date=March 10, 2023|archive-url=https://web.archive.org/web/20230310214711/https://www.mercurynews.com/2023/03/10/silicon-valley-bank-collapses-after-failing-to-raise-capital/|url-status=live}}</ref><ref>{{cite news|title=An immediate problem for Silicon Valley Bank customers: How to make payroll next week|first=Mark|last=Calvey|work=[[San Francisco Business Times]]|publisher=American City Business Journals|date=March 10, 2023|accessdate=March 11, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/10/silicon-valley-bank-startups-payroll-rippling.html|archive-date=March 11, 2023|archive-url=https://web.archive.org/web/20230311021144/https://www.bizjournals.com/sanjose/news/2023/03/10/silicon-valley-bank-startups-payroll-rippling.html|url-status=live}}</ref> More than 1,500 [[climate change]]–related technology startups had taken out loans or had [[Line of credit|lines of credit]] with Silicon Valley Bank. The failure came at a sensitive time when many such startups were scaling up to meet expected demand from the [[Inflation Reduction Act of 2022]].<ref>{{cite news |last=Gelles |first=David |date=March 12, 2023 |title=Silicon Valley Bank Collapse Threatens Climate Start-Ups |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/12/climate/silicon-valley-bank-climate.html |accessdate=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312214227/https://www.nytimes.com/2023/03/12/climate/silicon-valley-bank-climate.html |url-status=live }}</ref> |
| | 63 | |
| | 64 | Outside the technology startup space, [[Vox Media]] and [[BuzzFeed]] had its cash concentrated at the bank, and Vox Media saw its SVB-issued credit cards stop working.<ref name="Griffith" /><ref>{{Cite news |last=Bruell |first=Alexandra |date=March 13, 2023 |title=BuzzFeed Said More Than Half Its Cash Was Held at Silicon Valley Bank |work=[[The Wall Street Journal]] |url=https://www.wsj.com/livecoverage/stock-market-news-today-03-13-2023/card/buzzfeed-said-more-than-half-its-cash-was-held-at-silicon-valley-bank-uEfMaIJIibV9866pbDy5 |access-date=March 15, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314005605/https://www.wsj.com/livecoverage/stock-market-news-today-03-13-2023/card/buzzfeed-said-more-than-half-its-cash-was-held-at-silicon-valley-bank-uEfMaIJIibV9866pbDy5 |url-status=live }}</ref> The [[California wine]] industry was also affected by SVB's collapse, since it was a leading regional winery banker.<ref name="Mobley">{{cite news |last1=Mobley |first1=Esther |last2=Lander |first2=Jess |date=March 10, 2023 |title=Silicon Valley Bank collapse is causing a financial crisis for California's wine industry |work=[[San Francisco Chronicle]] |url=https://www.sfchronicle.com/food/wine/article/silicon-valley-bank-wine-california-17831927.php |url-status=live |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230310221006/https://www.sfchronicle.com/food/wine/article/silicon-valley-bank-wine-california-17831927.php |archive-date=March 10, 2023 }}</ref> Some [[Oregon wine]]ries were also affected.<ref>{{cite news |date=March 10, 2023 |title=Post-Silicon Valley Bank shutdown: Parsing the Oregon fallout |work=[[Portland Business Journal]] |publisher=[[American City Business Journals]] |location=Portland, Oregon |url=https://www.bizjournals.com/portland/news/2023/03/10/silicon-valley-bank-shutdown-regulators-oregon.html |accessdate=March 13, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311000904/https://www.bizjournals.com/portland/news/2023/03/10/silicon-valley-bank-shutdown-regulators-oregon.html |url-status=live }}</ref> The bank's premium wine division had about $1.1 billion in outstanding loans to about 400 clients.<ref>{{cite news |last=Barreira |first=Alex |date=March 13, 2023 |title=Silicon Valley Bank collapse leaves Wine Country vintners with $1 billion question |work=[[Silicon Valley Business Journal]] |publisher=[[American City Business Journals]] |location=San Jose, California |url=https://www.bizjournals.com/sanjose/news/2023/03/13/svb-collapse-spells-huge-concerns-for-wine-country.html |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313213357/https://www.bizjournals.com/sanjose/news/2023/03/13/svb-collapse-spells-huge-concerns-for-wine-country.html |url-status=live }}</ref> Businessman [[Mark Cuban]] reportedly had millions in the bank, along with his side venture [[Cost Plus Drugs]].<ref>{{Cite web |url=https://www.thestreet.com/technology/mark-cuban-had-millions-at-failed-silicon-valley-bank |title=Mark Cuban Had Millions at Failed Silicon Valley Bank |date=March 11, 2023 |last=Olinga |first=Luc |work=[[TheStreet]] |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312192922/https://www.thestreet.com/technology/mark-cuban-had-millions-at-failed-silicon-valley-bank |url-status=live }}</ref>{{better source needed|date=March 2023}} |
| | 65 | |
| | 66 | Since 2002, the bank had made more than $2 billion in loans and investments, including $1.6 billion in loans since 2014, to build [[affordable housing in Silicon Valley]] and San Francisco, as well as Massachusetts (from its 2021 acquisition of Boston Private). Housing advocates predicted delays and difficulty assembling funding.<ref>{{cite news|title=Silicon Valley Bank Collapse Puts San Francisco's Affordable Housing Projects in Limbo|first=Josh|last=Koehn|work=[[The San Francisco Standard]]|date=March 11, 2023|accessdate=March 13, 2023|url=https://sfstandard.com/housing-development/silicon-valley-bank-collapse-san-franciscos-affordable-housing-limbo/|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313080038/https://sfstandard.com/housing-development/silicon-valley-bank-collapse-san-franciscos-affordable-housing-limbo/|url-status=live}}</ref><ref>{{Cite web |last=Betancourt |first=Sarah |date=2023-03-13 |title=Housing industry in Massachusetts one of many to be impacted by Silicon Valley Bank fiasco |url=https://www.wgbh.org/news/local-news/2023/03/13/housing-industry-in-massachusetts-one-of-many-to-be-impacted-by-silicon-valley-bank-fiasco |access-date=2023-03-15 |website=[[WGBH Educational Foundation|GBH News]] |language=en |archive-date=March 15, 2023 |archive-url=https://web.archive.org/web/20230315142931/https://www.wgbh.org/news/local-news/2023/03/13/housing-industry-in-massachusetts-one-of-many-to-be-impacted-by-silicon-valley-bank-fiasco |url-status=live }}</ref> A 112-unit affordable housing project in San Francisco was scheduled to close a deal on March 10 for a $52 million construction loan from SVB.<ref>{{cite news|title=Built-environment companies affected by the recent bank collapses|first=Kristine|last=Klein|work=[[The Architect's Newspaper]]|location=New York City|date=March 14, 2023|accessdate=March 14, 2023|url=https://www.archpaper.com/2023/03/built-environment-companies-affected-by-the-recent-svb-and-signature-bank-collapses/|archive-date=March 14, 2023|archive-url=https://web.archive.org/web/20230314213604/https://www.archpaper.com/2023/03/built-environment-companies-affected-by-the-recent-svb-and-signature-bank-collapses/|url-status=live}}</ref> Some nonprofit organizations expect to deal with fallout from the bank's collapse for months. As a legacy of SVB's Boston Private acquisition, it provided free banking services to many nonprofits in [[San Mateo County, California]], who have needed to redirect donations to alternative bank accounts.<ref>{{cite news|title=Silicon Valley Bank collapse hits nonprofits|first=Jana|last=Kadah|work=San José Spotlight|location=San Jose, California|date=March 15, 2023|accessdate=March 16, 2023|url=https://sanjosespotlight.com/silicon-valley-bank-collapse-hits-santa-clara-county-san-jose-nonprofits/}}</ref> |
| | 67 | |
| | 68 | Ahmad Thomas, CEO of the [[Silicon Valley Leadership Group]], of which the bank was a member, described the failure as a setback for the [[San Francisco Bay Area]]'s startup ecosystem and noted that it would be difficult to replicate the bank's business model.<ref>{{cite news|title=Silicon Valley Bank's collapse undercuts key engine of Bay Area economy|first=Ethan|last=Baron|work=[[The Mercury News]]|location=San Jose, California|date=March 13, 2023|accessdate=March 13, 2023|url=https://www.mercurynews.com/2023/03/13/silicon-valley-banks-collapse-undercuts-key-engine-of-bay-area-economy/|archive-date=March 14, 2023|archive-url=https://web.archive.org/web/20230314000647/https://www.mercurynews.com/2023/03/13/silicon-valley-banks-collapse-undercuts-key-engine-of-bay-area-economy/|url-status=live}}</ref> |
| | 69 | |
| | 70 | ===Shareholders=== |
| | 71 | Silicon Valley Bank's holding company, SVB Financial Group, was a component of the [[S&P 500]]. At the time of the collapse, its largest shareholders included [[The Vanguard Group]], [[BlackRock]], and [[State Street Corporation]], which owned the stock in large [[exchange traded fund]]s that track the performance of [[S&P 500]].<ref>{{cite news |last=Portero |first=Ashley |date=March 13, 2023 |title=Local bank, wealth management firms and more companies among Silicon Valley Bank investors |work=[[South Florida Business Journal]] |publisher=[[American City Business Journals]] |location=Miami, Florida |url=https://www.bizjournals.com/southflorida/news/2023/03/13/silicon-valley-bank-local-firms-were-shareholders.html |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313202244/https://www.bizjournals.com/southflorida/news/2023/03/13/silicon-valley-bank-local-firms-were-shareholders.html |url-status=live }}</ref> The South Korean [[National Pension Service]] owned 100,000 shares in SVB's holding company, SVB Financial Group.<ref>{{Cite news |last1=Cho |first1=Kye-wan |last2=Choi |first2=Ha-yan |last3=Park |first3=Jong-o |last4=Ko |first4=Han-sol |date=2023-03-13 |title=Korea watches for fallout of SVB collapse amid fears of recession |work=[[The Hankyoreh]] |url=http://english.hani.co.kr/arti/english_edition/e_business/1083394.html |access-date=2023-03-13 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313192144/http://english.hani.co.kr/arti/english_edition/e_business/1083394.html |url-status=live }}</ref> [[CalPERS]] (California state pension fund) held about $67 million in bonds to the bank, or less than two percent of one percent of total investments, as of June 2022.<ref name="CalMatters Christopher" /> |
| | 72 | |
| | 73 | On March 13, shares of similar regional banks, including [[First Republic Bank]], [[Western Alliance Bancorporation]], and [[PacWest Bancorp]] plummeted.<ref name="ft_regional_banks">{{cite news |last1=Hughes |first1=Jennifer |last2=Fontanella-Khan |first2=James |last3=Aliaj |first3=Ortenca |last4=Masters |first4=Brooke |date=13 March 2023 |title=First Republic and other US regional banks tumble on fears of deposit flight |work=[[Financial Times]] |url=https://www.ft.com/content/7b3214e9-aa2e-4d3a-8724-fe71bb8dd006 |url-status=live |access-date=13 March 2023 |archive-url=https://web.archive.org/web/20230313161457/https://www.ft.com/content/7b3214e9-aa2e-4d3a-8724-fe71bb8dd006 |archive-date=March 13, 2023}}</ref><ref>{{cite web |last1=Singh |first1=Medha |date=March 13, 2023 |title=First Republic dives as fresh financing fails to soothe deposit outflow fears |url=https://www.reuters.com/business/finance/first-republic-slumps-additional-financing-fails-soothe-deposit-outflow-fears-2023-03-13/ |url-status=live |archive-url=https://web.archive.org/web/20230313145427/https://www.reuters.com/business/finance/first-republic-slumps-additional-financing-fails-soothe-deposit-outflow-fears-2023-03-13/ |archive-date=March 13, 2023 |access-date=13 March 2023 |website=[[Reuters]]}}</ref> |
| | 74 | |
| | 75 | ===Financial system=== |
| | 76 | [[Market capitalization]] of U.S. banks lost a combined $100{{nbsp}}billion in two days and European banks lost $50{{nbsp}}billion.<ref name=reuters_fwj/> SVB's losses highlighted the challenge that banks could face as interest rate increases reduced the market value of bonds that they purchased under low-rate policies.<ref name="hetzner">{{cite news |last=Hetzner |first=Christiaan |date=March 10, 2023 |title=SVB collapse highlights $620{{nbsp}}billion hole lurking in banks' balance sheets |work=[[Fortune (magazine)|Fortune]] |url=https://fortune.com/2023/03/10/svb-collapse-fdic-takeover-martin-gruenberg-620-billion-hole-banks-balance-sheet/ |url-status=live |access-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311150526/https://fortune.com/2023/03/10/svb-collapse-fdic-takeover-martin-gruenberg-620-billion-hole-banks-balance-sheet/ |archive-date=March 11, 2023}}</ref> Some companies have sought safety with larger commercial banks, transferring their deposits out from regional banks similar to Silicon Valley Bank, raising concerns about further instability in the banking sector.<ref name="WaPo Stein">{{cite news|title=Bailout talk roils Washington after Silicon Valley Bank's collapse|first=Jeff|last=Stein|newspaper=[[The Washington Post]]|location=Washington, D.C.|date=March 11, 2023|accessdate=March 11, 2023|url=https://www.washingtonpost.com/us-policy/2023/03/11/silicon-valley-bank-bailout-washington/|archive-date=March 11, 2023|archive-url=https://web.archive.org/web/20230311225158/https://www.washingtonpost.com/us-policy/2023/03/11/silicon-valley-bank-bailout-washington/|url-status=live}}</ref> Several banks, such as [[First Republic Bank]] and [[Western Alliance Bancorporation]], issued press releases seeking to calm investors.<ref name="ReutersPeers">{{Cite news |last=Yasmin |first=Mehnaz |date=March 10, 2023 |title=First Republic, Western Alliance seek to calm contagion worries from SVB meltdown |work=[[Reuters]] |url=https://www.reuters.com/business/finance/first-republic-western-alliance-calm-contagion-worries-svb-meltdown-2023-03-10/ |url-status=live |access-date=March 10, 2023 |archive-url=https://web.archive.org/web/20230311201906/https://www.reuters.com/business/finance/first-republic-western-alliance-calm-contagion-worries-svb-meltdown-2023-03-10/ |archive-date=March 11, 2023}}</ref><ref>{{cite news |last1=Weil |first1=Jonathan |date=March 10, 2023 |title=First Republic Hit by Silicon Valley Bank Failure |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/first-republic-hit-by-svb-failure-7431495e |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311000306/https://www.wsj.com/articles/first-republic-hit-by-svb-failure-7431495e |url-status=live }}</ref> |
| | 77 | |
| | 78 | Despite these concerns, banking experts believe that other banks will remain stable as SVB was overly specialized in providing banking to a risky sector of the economy, and [[financial regulation]]s have strengthened since the [[2008 financial crisis]], which preceded the [[Great Recession]].<ref name="Maruf-2023" /><ref>{{Cite news |last=Lynch |first=David J. |date=March 10, 2023 |title=Silicon Valley Bank failure raises fear of broader financial contagion |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/us-policy/2023/03/10/silicon-valley-bank-failure-financial-industry/ |access-date=March 10, 2023 |issn=0190-8286 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312140751/https://www.washingtonpost.com/us-policy/2023/03/10/silicon-valley-bank-failure-financial-industry/ |url-status=live }}</ref> SVB had, in 2021, reached the threshold under the [[Dodd–Frank Wall Street Reform and Consumer Protection Act|Dodd-Frank Act]] requiring it to submit a resolution plan ("living will") to the FDIC, which it did the following year. It had not participated in [[Stress test (financial)|periodic stress testing]] under the act, as the threshold for that requirement had been raised in 2018 under EGRRCPA; SVB's chief executive was among those requesting the change.<ref>{{Cite magazine |last1=Levitt |first1=Hannah |last2=Johnson |first2=Katanga |last3=Doherty |first3=Katherine |date=March 11, 2023 |title=SVB CEO Greg Becker lobbied the government to relax some Dodd-Frank provisions on regional lenders in 2015. Trump did in 2018. |url=https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-greg-becker-dodd-frank-trump-rollback-systemically-important-fdic/ |magazine=[[Fortune (magazine)|Fortune]] |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311165947/https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-greg-becker-dodd-frank-trump-rollback-systemically-important-fdic/ |url-status=live }}</ref><ref>{{Cite news |last=Levintona |first=Hannah |date=March 11, 2023 |title=Long Before Silicon Valley Bank's Collapse, Its CEO Helped Kill Tougher Oversight of Banks Like His |work=[[Mother Jones (magazine)|Mother Jones]] |url=https://www.motherjones.com/politics/2023/03/silicon-valley-bank-greg-becker-dodd-frank/ |access-date=March 11, 2023 |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311185225/https://www.motherjones.com/politics/2023/03/silicon-valley-bank-greg-becker-dodd-frank/ |url-status=live }}</ref> |
| | 79 | |
| | 80 | On March 12, 2023, [[Signature Bank]] was also closed, being taken into possession by the [[New York State Department of Financial Services]].<ref>{{Cite news |last=Lang |first=Hannah |date=March 12, 2023 |title=Regulators close Signature bank, announce plan to make depositors whole |work=[[Reuters]] |url=https://www.reuters.com/business/finance/new-york-state-regulators-close-signature-bank-2023-03-12/ |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312233129/https://www.reuters.com/business/finance/new-york-state-regulators-close-signature-bank-2023-03-12/ |url-status=live }}</ref><ref>{{Cite news |last=Reyes |first=Mike |date=March 12, 2023 |title=Signature Bank Closed by New York Regulators in SVB's Wake |work=[[Bloomberg L.P.|Bloomberg]] |url=https://www.bloomberg.com/news/articles/2023-03-12/signature-bank-closed-by-new-state-regulators-fdic-says |access-date=March 12, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313025345/https://www.bloomberg.com/news/articles/2023-03-12/signature-bank-closed-by-new-state-regulators-fdic-says |url-status=live }}</ref> Following the bank failures, the Federal Reserve announced the creation of a [[Bank Term Funding Program]] to shore up liquidity for other at-risk banks.<ref>{{cite web |last=Cox |first=Jeff |date=March 12, 2023 |title=U.S. government steps in and says people with funds deposited at SVB will be able to access their money |url=https://www.cnbc.com/2023/03/12/regulators-unveil-plan-to-stem-damage-from-svb-collapse.html |website=[[CNBC]] |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312222220/https://www.cnbc.com/2023/03/12/regulators-unveil-plan-to-stem-damage-from-svb-collapse.html |url-status=live }}</ref><ref>{{cite press release |url=https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20230312a1.pdf |title=Bank Term Funding Program |access-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312224628/https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20230312a1.pdf |archive-date=March 12, 2023 |url-status=live |publisher=[[US Federal Reserve]]}}</ref> |
| | 81 | |
| | 82 | [[Circle (company)|Circle]], a peer-to-peer payments technology company that issues the [[stablecoin]] [[USD Coin]] (USDC), attested that SVB is one of the six banking partners used by the company to manage its cash reserves for USDC, with $3.3 billion (approximately 8%) of its cash reserves held there.<ref>{{Cite news |last1=Melinek |first1=Jacquelyn |last2=Wilhem |first2=Alex |date=March 10, 2023 |title=Uncertainty stands around multibillion USDC empire as issuer Circle held reserves at Silicon Valley Bank |url=https://techcrunch.com/2023/03/10/uncertainty-stands-around-multi-billion-usdc-empire-as-issuer-circle-held-reserves-at-silicon-valley-bank/ |access-date=March 10, 2023 |work=[[TechCrunch]] |archive-date=March 11, 2023 |archive-url=https://web.archive.org/web/20230311150334/https://techcrunch.com/2023/03/10/uncertainty-stands-around-multi-billion-usdc-empire-as-issuer-circle-held-reserves-at-silicon-valley-bank/ |url-status=live }}</ref><ref>{{Cite web |title=An Update on USDC and Silicon Valley Bank |url=https://www.circle.com/blog/an-update-on-usdc-and-silicon-valley-bank |access-date=2023-03-15 |website=www.circle.com |language=en |archive-date=March 15, 2023 |archive-url=https://web.archive.org/web/20230315124402/https://www.circle.com/blog/an-update-on-usdc-and-silicon-valley-bank |url-status=live }}</ref> USDC's price fell below its US$1 pegged exchange rate during trading on March 10 and 11, causing [[Coinbase]] to halt conversions between USDC and U.S. dollars.<ref name="NYT Yaffe-Bellany" /> USDC had recovered most of the losses after Circle assured investors that the peg would remain honored.<ref>{{Cite news |last1=Ranasinghe |first1=Dhara |last2=Murdoch |first2=Scott |last3=Murdoch |first3=Scott |date=March 12, 2023 |title=World markets set for aftershocks as SVB collapse ripples out |work=[[Reuters]] |url=https://www.reuters.com/markets/world-markets-set-aftershocks-svb-collapse-ripples-out-2023-03-12/ |access-date=March 12, 2023 |archive-date=March 12, 2023 |archive-url=https://web.archive.org/web/20230312225419/https://www.reuters.com/markets/world-markets-set-aftershocks-svb-collapse-ripples-out-2023-03-12/ |url-status=live }}</ref> |
| | 83 | |
| | 84 | Investors and economists believe that a previously expected [[History of Federal Open Market Committee actions#Historical actions|Federal Reserve interest rate increase]] on March 22 has become less likely as a result of the SVB collapse and [[March 2023 United States bank failures|other recent bank failures]].<ref>{{cite news |last=Smialek |first=Jeanna |date=March 13, 2023 |title=SVB Collapse Upsets Expectations for Federal Reserve's Rate Decision |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/13/business/economy/federal-reserve-interest-rates.html |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313130312/https://www.nytimes.com/2023/03/13/business/economy/federal-reserve-interest-rates.html |url-status=live }}</ref> |
| | 85 | |
| | 86 | The failure complicates an ongoing lobbying effort by large banks against the Federal Reserve's requirement that they hold cash equivalents to government-backed securities, such as the Treasury bonds that Silicon Valley Bank invested in.<ref name="NYT Smialek">{{cite news|title=After SVB Collapse, Fed and Lawmakers Eye Bank Rules|first1=Jeanna|last1=Smialek|first2=Emily|last2=Flitter|work=[[The New York Times]]|location=New York City|date=March 15, 2023|accessdate=March 15, 2023|url=https://www.nytimes.com/2023/03/15/business/economy/silicon-valley-bank-federal-reserve-regulation.html|archive-date=March 15, 2023|archive-url=https://web.archive.org/web/20230315203702/https://www.nytimes.com/2023/03/15/business/economy/silicon-valley-bank-federal-reserve-regulation.html|url-status=live}}</ref> |
| | 87 | |
| | 88 | ===Legal actions=== |
| | 89 | On March 13, the [[Federal Reserve Board of Governors]] announced an investigation by Vice Chair for Supervision [[Michael Barr (Treasury official)|Michael Barr]] into supervision and regulation of the bank, which will be released publicly by May 1.<ref>{{cite press release |title=Federal Reserve Board announces that Vice Chair for Supervision Michael S. Barr is leading a review of the supervision and regulation of Silicon Valley Bank, in light of its failure |publisher=[[Federal Reserve Board of Governors]] |location=Washington, D.C. |date=March 13, 2023 |accessdate=March 13, 2023 |url=https://www.federalreserve.gov/newsevents/pressreleases/bcreg20230313a.htm |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313202311/https://www.federalreserve.gov/newsevents/pressreleases/bcreg20230313a.htm |url-status=live }}</ref> The [[U.S. Securities and Exchange Commission]] and [[United States Department of Justice|U.S. Department of Justice]] have reportedly opened investigations into the bank's financial disclosures and executives' recent trading plans.<ref>{{cite news |last1=Goldstein |first1=Matthew |last2=Benner |first2=Katie |date=March 14, 2023 |title=U.S. Is Said to Open Investigation Into Silicon Valley Bank Collapse |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/14/business/silicon-valley-bank-investigation.html |accessdate=March 14, 2023 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314154959/https://www.nytimes.com/2023/03/14/business/silicon-valley-bank-investigation.html |url-status=live }}</ref> |
| | 90 | |
| | 91 | On March 13, an SVB shareholder filed a [[Securities Class Action]] against the company in the [[United States District Court for the Northern District of California|U.S. District Court for the Northern District of California]], alleging [[fraud]] for false statements made by executives and the bank.<ref>{{Cite web |url=https://www.bloomberg.com/news/articles/2023-03-13/svb-hit-with-first-shareholder-fraud-lawsuit-over-bank-failure |title=Silicon Valley Bank Hit With First Shareholder Fraud Lawsuit Over Collapse |date=March 13, 2023 |last=Rosenblatt |first=Joel |work=[[Bloomberg News]] |access-date=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313180326/https://www.bloomberg.com/news/articles/2023-03-13/svb-hit-with-first-shareholder-fraud-lawsuit-over-bank-failure |url-status=live }}</ref> |
| | 92 | |
| | 93 | Senator [[Elizabeth Warren]] of Massachusetts introduced legislation, cosponsored by about 50 Democrats in the Senate and House of Representatives, that would roll back some provisions of the [[Economic Growth, Regulatory Relief, and Consumer Protection Act|EGRRCPA]], including regular stress testing. Senator [[Sherrod Brown]] of Ohio announced plans to hold a Congressional hearing on the bank's failure.<ref name="NYT Smialek" /> |
| | 94 | |
| | 95 | ==Reactions== |
| | 96 | ===Official responses=== |
| | 97 | U.S. President [[Joe Biden]] discussed the collapse with California Governor [[Gavin Newsom]] on March 11.<ref name="Politico Wu">{{cite news|title=Congressional briefing on Silicon Valley Bank failure postponed|first1=Nicholas|last1=Wu|first2=Sarah|last2=Ferris|work=[[Politico]]|location=Arlington County, Virginia|date=March 11, 2023|accessdate=March 11, 2023|url=https://www.politico.com/news/2023/03/11/california-congress-silicon-valley-bank-failure-00086656|archive-date=March 11, 2023|archive-url=https://web.archive.org/web/20230311212253/https://www.politico.com/news/2023/03/11/california-congress-silicon-valley-bank-failure-00086656|url-status=live}}</ref> In televised remarks from the [[White House]] before markets opened on March 13, Biden expressed confidence in the resilience of the banking system, pledged that the government would ensure the availability of deposits without rewarding investors with taxpayer funds, and promised to hold bank executives accountable and propose rule changes to prevent future failures.<ref>{{cite news |last=Baker |first=Peter |author-link=Peter Baker (journalist) |date=March 13, 2023 |title=Biden assures Americans: 'Our banking system is safe' |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/13/business/biden-assures-americans-our-banking-system-is-safe.html |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313134910/https://www.nytimes.com/2023/03/13/business/biden-assures-americans-our-banking-system-is-safe.html |url-status=live }}</ref> Israeli Prime Minister [[Benjamin Netanyahu]] pledged to take steps to help Israeli technology companies get through the liquidity crisis.<ref>{{cite news|title=After SVB collapse, Netanyahu pledges steps to help Israeli tech firms 'if needed'|work=[[The Times of Israel]]|location=Jerusalem|date=March 11, 2023|accessdate=March 11, 2023|url=https://www.timesofisrael.com/liveblog_entry/after-svb-collapse-netanyahu-pledges-steps-to-help-israeli-tech-firms-if-needed/|archive-date=March 11, 2023|archive-url=https://web.archive.org/web/20230311174825/https://www.timesofisrael.com/liveblog_entry/after-svb-collapse-netanyahu-pledges-steps-to-help-israeli-tech-firms-if-needed/|url-status=live}}</ref> Indian IT minister [[Rajeev Chandrasekhar]] met with companies to assess the effect on India's startup community.<ref name="NYT Jin Yu Young">{{cite news |author=Young |first=Jin Yu |date=March 13, 2023 |title=Asian regulators move quickly to calm investors |work=[[The New York Times]] |url=https://www.nytimes.com/live/2023/03/13/business/silicon-valley-bank#asian-regulators-move-quickly-to-calm-investors |url-access=subscription |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313144757/https://www.nytimes.com/live/2023/03/13/business/silicon-valley-bank#asian-regulators-move-quickly-to-calm-investors |url-status=live }}</ref> UK Prime Minister [[Rishi Sunak]],<ref>{{cite news |author=Young |first=Jin Yu |date=March 13, 2023 |title=HSBC to Buy Silicon Valley Bank's UK Subsidiary |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/13/business/svb-uk-hsbc-bank.html |url-access=subscription |accessdate=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313080312/https://www.nytimes.com/2023/03/13/business/svb-uk-hsbc-bank.html |url-status=live }}</ref> Japanese Chief Cabinet Secretary [[Hirokazu Matsuno]], and South Korea's [[Financial Services Commission (South Korea)|Financial Services Commission]] each downplayed any systemic risk to their countries' financial sectors.<ref name="NYT Jin Yu Young" /> |
| | 98 | |
| | 99 | ===Debate over government intervention=== |
| | 100 | A group of 599 venture capitalists,<ref>{{cite news|title=The Whole World Was Watching: Five Days in March|first=Barry|last=Holtzclaw|work=[[San Jose Inside]]|publisher=Metro Newspapers|location=San Jose, California|date=March 15, 2023|accessdate=March 15, 2023|url=https://www.sanjoseinside.com/news/the-whole-world-was-watching-five-days-in-march/|archive-date=March 15, 2023|archive-url=https://web.archive.org/web/20230315175141/https://www.sanjoseinside.com/news/the-whole-world-was-watching-five-days-in-march/|url-status=live}}</ref> including [[Garry Tan]] and [[David O. Sacks]], along with hedge fund manager [[Bill Ackman]]<ref name="WaPo Stein" /> and California State Senator [[Scott Wiener]], called for a government intervention to protect uninsured depositors.<ref>{{cite news|title=Silicon Valley Bank Collapse: Bay Area Elected Officials React|first=Josh|last=Koehn|work=[[The San Francisco Standard]]|date=March 10, 2023|accessdate=March 12, 2023|url=https://sfstandard.com/politics/silicon-valley-bank-collapse-bay-area-elected-officials-elon-musk/|archive-date=March 11, 2023|archive-url=https://web.archive.org/web/20230311231248/https://sfstandard.com/politics/silicon-valley-bank-collapse-bay-area-elected-officials-elon-musk/|url-status=live}}</ref> Representatives [[Ruben Gallego]] of Arizona and [[Eric Swalwell]] of California called for depositors to be made whole,<ref name="WaPo Stein" /> while Representatives [[Ro Khanna]]<ref name="Politico Wu" /> and [[Brad Sherman]] of California called on the [[United States Department of the Treasury|Treasury Department]] and FDIC to affirm that depositors would be protected so they could make payroll.<ref name="WaPo Stein" /> Representative [[Matt Gaetz]] of Florida and Republican presidential candidates [[Nikki Haley]] and [[Vivek Ramaswamy]] expressed opposition to any taxpayer-funded bailout of the bank. Ramaswamy suggested that the FDIC's deposit insurance limit be raised instead.<ref name="WaPo Stein" /><ref>{{cite news|title=GOP presidential candidates react to Silicon Valley Bank collapse; Trump blames 'out-of-control Democrats'|first=Jessica|last=Chasmar|work=[[Fox News]]|date=March 12, 2023|accessdate=March 12, 2023|url=https://www.foxnews.com/politics/gop-presidential-candidates-react-silicon-valley-bank-collapse-trump-blames-out-control-dems|archive-date=March 12, 2023|archive-url=https://web.archive.org/web/20230312183209/https://www.foxnews.com/politics/gop-presidential-candidates-react-silicon-valley-bank-collapse-trump-blames-out-control-dems|url-status=live}}</ref> |
| | 101 | |
| | 102 | Governor Newsom,<ref>{{cite press release |title=Governor Newsom Issues Statement on Biden Administration's Action on Silicon Valley Bank |publisher=Office of Governor [[Gavin Newsom]] |date=March 12, 2023 |accessdate=March 12, 2023 |url=https://www.gov.ca.gov/2023/03/12/governor-newsom-issues-statement-on-biden-administrations-action-on-silicon-valley-bank/ |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313022245/https://www.gov.ca.gov/2023/03/12/governor-newsom-issues-statement-on-biden-administrations-action-on-silicon-valley-bank/ |url-status=live }}</ref> Senator [[Kyrsten Sinema]] of Arizona,<ref name="NYT Weisman" /> and Representative [[Anna Eshoo]] of California applauded the FDIC's announcement that it would protect depositors without affecting taxpayers via the [[Bank Term Funding Program]].<ref name="SJSpotlight mayor" /> San Jose Mayor [[Matt Mahan]] criticized the federal government's response to the bank's failure as slow and indicative of its misunderstanding of Silicon Valley startups' contribution to the national economy.<ref name="SJSpotlight mayor">{{cite news|title=San Jose mayor blasts 'weak' government response to Silicon Valley Bank collapse|work=San José Spotlight|location=San Jose, California|date=March 12, 2023|accessdate=March 12, 2023|url=https://sanjosespotlight.com/san-jose-mayor-blasts-weak-government-response-to-silicon-valley-bank-collapse/|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313005352/https://sanjosespotlight.com/san-jose-mayor-blasts-weak-government-response-to-silicon-valley-bank-collapse/|url-status=live}}</ref><ref name="SFBT Fruehling">{{cite news|title=Feds mull plan to insure all Silicon Valley Bank deposits|first=Douglas|last=Fruehling|work=[[San Francisco Business Times]]|publisher=American City Business Journals|date=March 12, 2023|accessdate=March 12, 2023|url=https://www.bizjournals.com/sanjose/news/2023/03/12/silicon-valley-bank-deposits-insurance.html|archive-date=March 13, 2023|archive-url=https://web.archive.org/web/20230313011041/https://www.bizjournals.com/sanjose/news/2023/03/12/silicon-valley-bank-deposits-insurance.html|url-status=live}}</ref> Senators [[Elizabeth Warren]] of Massachusetts<ref name="NYT-20230313" /> and [[Bill Hagerty]] of Tennessee criticized regulators for protecting large depositors, including some of the venture capital firms that triggered the bank run.<ref name="SFBT Gardner" /> Republican lawmakers and financial policy experts criticized the emergency actions as a bailout that could create a [[moral hazard]] at other banks.<ref name="bailout">{{cite news |last1=Smialek |first1=Jeanna |last2=Rappeport |first2=Alan |date=March 14, 2023 |title=Was this a Bailout? Skeptics Descend on Silicon Valley Bank Response |work=[[The New York Times]] |url=https://www.nytimes.com/2023/03/13/business/economy/svb-bailout-questions.html |access-date=2023-03-14 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314135545/https://www.nytimes.com/2023/03/13/business/economy/svb-bailout-questions.html |url-status=live }}</ref> Senator [[J. D. Vance]] of Ohio complained that the federal government would not have taken similar action for a smaller bank or credit union.<ref name="NYT Weisman" /> Economist [[Paul Krugman]] compared the failure and resulting government action to the [[savings and loan crisis]].<ref>{{cite news|title=In SVB Collapse, Silicon Valley Demands Government Protect it From Itself|first=Jonathan|last=Vankin|work=California Local|location=Sacramento|date=March 15, 2023|accessdate=March 15, 2023|url=https://californialocal.com/localnews/sacramento/ca/article/show/30038-silicon-valley-bank-collapse-failure-bailout/|archive-date=March 15, 2023|archive-url=https://web.archive.org/web/20230315193655/https://californialocal.com/localnews/sacramento/ca/article/show/30038-silicon-valley-bank-collapse-failure-bailout/|url-status=live}}</ref> |
| | 103 | |
| | 104 | Senator Warren, Representative Khanna, and Mayor Mahan called for earnings from CEO Greg Becker's recent sale of SVB shares to be [[Clawback|clawed back]] and returned to depositors.<ref name="NYT-20230313" /><ref name="SJSpotlight mayor" /> |
| | 105 | |
| | 106 | ===Debate about causes=== |
| | 107 | Cryptocurrency proponents cited the collapse in support of a decentralized monetary system. Others in the tech sector proposed that recent events in the cryptocurrency business, such as the [[bankruptcy of FTX]] and the exit of cryptocurrency-focused banks, had conditioned depositors to panic and noted that the FDIC's limited guarantee had no parallel in cryptocurrency.<ref name="NYT Yaffe-Bellany" /> |
| | 108 | |
| | 109 | Senators Warren and [[Bernie Sanders]] of Vermont argued that the bank's failure could have been avoided by the stress testing that was required of banks of SVB's size until the passage of the [[Economic Growth, Regulatory Relief, and Consumer Protection Act|EGRRCPA]]; they called for the law to be repealed and criticized Becker for having supported it.<ref name="NYT-20230313" /><ref>{{cite news|last=Teh|first=Cheryl|date=March 13, 2023|title=Bernie Sanders says Silicon Valley Bank's failure is the 'direct result' of a Trump-era bank regulation policy|url=https://www.businessinsider.com/silicon-valley-bank-bernie-sanders-donald-trump-blame-2023-3|work=[[Business Insider]]|location=|access-date=March 14, 2023|archive-date=March 14, 2023|archive-url=https://web.archive.org/web/20230314013917/https://www.businessinsider.com/silicon-valley-bank-bernie-sanders-donald-trump-blame-2023-3|url-status=live}}</ref><ref>{{cite news|last=Queally|first=Jon|date=March 13, 2023|title=Sanders Calls for Repeal of Trump-Era Deregulation Blamed for Bank Collapses|url=https://www.commondreams.org/news/taxpayer-bailout-silicon-valley-bank|work=[[Common Dreams]]|location=|access-date=March 14, 2023|archive-date=March 14, 2023|archive-url=https://web.archive.org/web/20230314024644/https://www.commondreams.org/news/taxpayer-bailout-silicon-valley-bank|url-status=live}}</ref> Warren and Senator [[Richard Blumenthal]] of Connecticut asked the Department of Justice and Securities and Exchange Commission to investigate whether senior bank executives had violated any laws.<ref name="NYT Smialek" /> |
| | 110 | |
| | 111 | Senator [[John Kennedy (Louisiana politician)|John Kennedy]] of Louisiana criticized regulators for lax oversight of the bank. However, the [[Bank Policy Institute]], which represents large banks, contended that the failures of SVB and Signature Bank were primarily caused by failures of management and supervision, rather than regulation, and stressed its members' resiliency.<ref name="NYT Smialek" /> |
| | 112 | |
| | 113 | Several Republicans and conservative commentators argued{{snd}}without evidence{{snd}}that the bank failed because it was "[[woke]]" and distracted by its workforce diversity efforts, which are typical of mid-sized and large banks in the U.S.<ref>{{cite news|title=No, Diversity Did Not Cause Silicon Valley Bank’s Collapse|first=Linda|last=Qiu|work=[[The New York Times]]|location=New York City|date=March 15, 2023|accessdate=March 15, 2023|url=https://www.nytimes.com/2023/03/15/us/politics/silicon-valley-bank-collapse-woke-fact-check.html|archive-date=March 15, 2023|archive-url=https://web.archive.org/web/20230315214658/https://www.nytimes.com/2023/03/15/us/politics/silicon-valley-bank-collapse-woke-fact-check.html|url-status=live}}</ref> Florida Governor [[Ron DeSantis]],<ref name="WaPo Mark">{{Cite news |last=Mark |first=Julian |date=March 14, 2023 |title=GOP blames Silicon Valley Bank's collapse on 'ESG' policies. Here's what to know. |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/business/2023/03/14/svb-esg-woke-investing/ |access-date=March 14, 2023 |issn=0190-8286 |archive-date=March 14, 2023 |archive-url=https://web.archive.org/web/20230314110656/https://www.washingtonpost.com/business/2023/03/14/svb-esg-woke-investing/ |url-status=live }}</ref> Representative [[Marjorie Taylor Greene]] of Georgia,<ref name="VanityFair Ecarma">{{cite magazine |last1=Ecarma |first1=Caleb |title=Republicans are blaming Silicon Valley Bank's collapse on the "woke" left |url=https://www.vanityfair.com/news/2023/03/republicans-blaming-silicon-valley-banks-collapse-woke |date=March 13, 2023 |magazine=[[Vanity Fair (magazine)|Vanity Fair]] |access-date=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313194639/https://www.vanityfair.com/news/2023/03/republicans-blaming-silicon-valley-banks-collapse-woke |url-status=live }}</ref> and [[Tucker Carlson]] tied the bank's failure to its [[diversity, equity, and inclusion]] (DEI) program.<ref name="WaPo Mark" /> Greene and Representative [[James Comer (politician)|James Comer]] of Kentucky cited the bank's [[environmental, social, and corporate governance]] investment program. [[Andy Kessler (author)|Andy Kessler]] suggested that the presence of minorities and military veterans on the bank's board of directors served as a distraction.<ref name="VanityFair Ecarma" /> The ''[[New York Post]]'' blamed the DEI efforts of a manager at the UK subsidiary for the risks that arose in the U.S.<ref>{{Cite magazine |last=Chait |first=Jonathan |date=March 13, 2023 |title=Republicans Blame Silicon Valley Bank Failure on 'Wokeness'; Buying too many Treasury bonds is extremely woke, obviously. |url=https://nymag.com/intelligencer/2023/03/republicans-blame-silicon-valley-bank-failure-on-wokeness.html |magazine=[[Intelligencer (website)|Intelligencer]] |access-date=March 13, 2023 |archive-date=March 13, 2023 |archive-url=https://web.archive.org/web/20230313195735/https://nymag.com/intelligencer/2023/03/republicans-blame-silicon-valley-bank-failure-on-wokeness.html |url-status=live }}</ref> An allegation spread in conservative media that SVB had donated over $73 million to the "BLM Movement & Related Causes," citing a database that had been created by a conservative organization to purportedly show "who funded the BLM riots." Analysis by ''[[Talking Points Memo]]'' found the database actually showed corporate donations to a variety of diversity programs that had no apparent relationship to the [[Black Lives Matter]] movement.<ref>{{cite news |last1=Marshall |first1=Josh |title=A Quick Look at the Lying Trumpist Liars Behind that Database on Corporate Giving to “BLM” |work=Talking Points Memo |date=March 15, 2022 |url=https://talkingpointsmemo.com/edblog/a-quick-look-at-the-lying-trumpist-liars-behind-that-database-on-corprate-giving-to-blm |access-date=March 15, 2023 |archive-date=March 15, 2023 |archive-url=https://web.archive.org/web/20230315210504/https://talkingpointsmemo.com/edblog/a-quick-look-at-the-lying-trumpist-liars-behind-that-database-on-corprate-giving-to-blm |url-status=live }}</ref> Representative [[Nancy Mace]] of South Carolina criticized other members of Congress for politicizing the bank's failure and urged caution in making public comments that could affect the market.<ref name="NYT Weisman" /> The ''[[Associated Press]]'' also investigated claims that the collapse was caused by a "woke agenda" and found that there was no evidence to support the claims.<ref>{{cite news |last1=Marcelo |first1=Philip |date=March 16, 2023 |title=Claims say ‘woke’ policies led to SVB’s demise. Here are the facts. |work=[[Associated Press]] |url=https://apnews.com/article/silicon-valley-bank-fdic-svb-california-d84764deb458371667ac7f850f430f22 |access-date=March 16, 2023 |archive-date=March 16, 2023 |archive-url=https://web.archive.org/web/20230316012642/https://apnews.com/article/silicon-valley-bank-fdic-svb-california-d84764deb458371667ac7f850f430f22 |url-status=live }}</ref> |
| | 114 | |
| | 115 | ==See also== |
| | 116 | {{Portal|Banks|Business|California|San Francisco Bay Area|United States}} |
| | 117 | * [[List of bank failures in the United States (2008–present)]] |
| | 118 | * [[March 2023 United States bank failures]] |
| | 119 | |
| | 120 | {{Clear}} |
| | 121 | |
| | 122 | ==References== |
| | 123 | {{Reflist}} |
| | 124 | |
| | 125 | {{2023 United States bank failures}} |
| | 126 | |
| | 127 | [[Category:2023 in California]] |
| | 128 | [[Category:2023 in economics]] |
| | 129 | [[Category:Bank failures in the United States|Silicon Valley Bank]] |
| | 130 | [[Category:Economic history of California]] |
| | 131 | [[Category:Economy of Santa Clara, California]] |
| | 132 | [[Category:History of Silicon Valley]] |
| | 133 | [[Category:March 2023 events in the United States]] |
| | 134 | [[Category:2023 in technology]] |
projects / BK-2020-09.git / blame_incremental