AMN
Silicon Valley Bank which served mostly technology workers and ventures capital-backed companies collapsed yesterday, March 10, marking the largest failure of a U.S. financial institution.
Startup-focused biggest US lender SVB Financial Group became the largest bank to fail since the 2008 financial crisis in a sudden collapse that roiled global markets and left billions of dollars belonging to companies and investors stranded. Greg Becker, Silicon Valley Bank’s chief executive officer, played a prominent role in steering the lender, valued at over $40 billion till last year. Becker, who served at the Federal Reserve Bank of San Francisco as among its board of directors, departed the board Friday following the crisis.
Merely 24 hours before the sudden halt of the company’s operations, Becker had personally assured the clients their money was safe. One of the reasons it suffered the situation was because of the overall turmoil in the technology and crypto start-up world due to reasons including mass layoffs, and economic slowdown. The bank had 209 billion dollars in assets and 175 billion dollars in deposits at the time of failure, the Federal Deposit Insurance Corporation said in a statement. The liquidity issue at Santa Clara-based SVB came to light on Thursday night, following which its stock price crashed by more than half.
Yesterday, the impact of SVB’s troubles was felt on Dalal Street too. As investors pressed the sell button, the Sensex fell by over 900 points in early trades but some bottom fishing helped it close at 59,135, down 671 points or 1.1 per cent on the day. Like their global counterparts, in India, too banking and financial stocks led the slide with BSE’s banking sector and financial services indices closing around 1.8 per cent down.