{"id":2454,"date":"2023-03-17T06:32:24","date_gmt":"2023-03-17T11:32:24","guid":{"rendered":"https:\/\/embarrdowns.com\/silicon-valley-bank-collapse-what-you-need-to-know\/"},"modified":"2023-03-17T06:32:25","modified_gmt":"2023-03-17T11:32:25","slug":"silicon-valley-bank-collapse-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/silicon-valley-bank-collapse-what-you-need-to-know\/","title":{"rendered":"Silicon Valley Bank Collapse: What You Need to Know"},"content":{"rendered":"

On March 17, 2023, Silicon Valley Bank collapsed after a two-day bank run starting on March 8th, becoming the second-largest bank failure in U.S. history.[0]<\/a><\/sup> SVB had emerged as the bank to go-to for tech startups and venture capital firms, but its downfall was caused by three main factors.[1]<\/a><\/sup> Firstly, SVB had a high percentage of large deposits that were not covered by FDIC deposit insurance. Secondly, the bank had become overly reliant on low-cost financing from a federal home-loan bank, and lastly, the bank had no chief risk officer for eight months in 2020, the year of the crypto crisis and tech meltdown.[2]<\/a><\/sup><\/p>\n

This bank run triggered a liquidity crisis among smaller, regional banks, and led to the U.S. Treasury, Federal Reserve, and FDIC\u2019s coordinated Sunday night liquidity backstop. This backstop, in the form of one-year loans to eligible depository institutions, was made possible by the Bank Term Funding Program (BTFP).[3]<\/a><\/sup><\/p>\n

For depositors of SVB and other affected banks, it is important to know that the FDIC insures deposits up to $250,000.[3]<\/a><\/sup> Those with deposits beyond the limit may be out of luck, and should take caution with any banking transactions.<\/p>\n

0. <\/span>“March 2023 Newsletter: A Look at Bank Solvency” Lyn Alden, 13 Mar. 2023, https:\/\/www.lynalden.com\/march-2023-newsletter\/<\/a><\/a><\/p>\n

1. <\/span>“How does a bank collapse in 48 hours? A timeline of the SVB fall” CNN, 13 Mar. 2023, https:\/\/www.cnn.com\/2023\/03\/11\/business\/svb-bank-collapse-explainer-timeline\/index.html<\/a><\/a><\/p>\n

2. <\/span>“We Know Who’s to Blame for the Silicon Valley Bank Failure” The Atlantic, 16 Mar. 2023, https:\/\/www.theatlantic.com\/ideas\/archive\/2023\/03\/svb-collapse-fed-regulation-financial-system-safety\/673401<\/a><\/a><\/p>\n

3. <\/span>“A bailout or not? Did the federal government bailout Silicon Valley Bank and Signature Bank?” ABC News, 16 Mar. 2023, https:\/\/abcnews.go.com\/Business\/bailout-federal-government-bailout-silicon-valley-bank-signature\/story?id=97846142<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On March 17, 2023, Silicon Valley Bank collapsed after a two-day bank run starting on March 8th, becoming the second-largest bank failure in U.S. history.[0]<\/a><\/sup> SVB had emerged as the bank to go-to for tech startups and venture capital firms, but its downfall was caused by three main factors.[1]<\/a><\/sup> Firstly, SVB had a high percentage of large deposits that were not covered by FDIC deposit insurance. Secondly, the bank had become overly reliant on low-cost financing from a federal home-loan bank, and lastly, the bank had no chief risk officer for eight months in 2020, the year of the crypto crisis and tech meltdown.[2]<\/a><\/sup><\/p>\n

This bank run triggered a liquidity crisis among smaller, regional banks, and led to the U.S. Treasury, Federal Reserve, and FDIC\u2019s coordinated Sunday night liquidity backstop. This backstop, in the form of one-year loans to eligible depository institutions, was made possible by the Bank Term Funding Program (BTFP).[3]<\/a><\/sup><\/p>\n

For depositors of SVB and other affected banks, it is important to know that the FDIC insures deposits up to $250,000.[3]<\/a><\/sup> Those with deposits beyond the limit may be out of luck, and should take caution with any banking transactions.<\/p>\n

0. <\/span>“March 2023 Newsletter: A Look at Bank Solvency” Lyn Alden, 13 Mar. 2023, https:\/\/www.lynalden.com\/march-2023-newsletter\/<\/a><\/a><\/p>\n

1. <\/span>“How does a bank collapse in 48 hours? A timeline of the SVB fall” CNN, 13 Mar. 2023, https:\/\/www.cnn.com\/2023\/03\/11\/business\/svb-bank-collapse-explainer-timeline\/index.html<\/a><\/a><\/p>\n

2. <\/span>“We Know Who’s to Blame for the Silicon Valley Bank Failure” The Atlantic, 16 Mar. 2023, https:\/\/www.theatlantic.com\/ideas\/archive\/2023\/03\/svb-collapse-fed-regulation-financial-system-safety\/673401<\/a><\/a><\/p>\n

3. <\/span>“A bailout or not? Did the federal government bailout Silicon Valley Bank and Signature Bank?” ABC News, 16 Mar. 2023, https:\/\/abcnews.go.com\/Business\/bailout-federal-government-bailout-silicon-valley-bank-signature\/story?id=97846142<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":2453,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2454"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=2454"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2454\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/2453"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=2454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=2454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=2454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}