Silicon Valley Bank (SVB) was a state-chartered commercial bank headquartered in Santa Clara, California. It operated branches in California and Massachusetts and was the largest bank by deposits in Silicon Valley. The bank was part of SVB Financial Group, a publicly traded bank holding company that had offices in 13 other U.S. states and over a dozen international jurisdictions.
On March 10, 2023, SVB failed due to a run on its deposits. This was caused by a series of central bank-endorsed interest rate hikes in the face of global inflation. As a result, many of SVB's customers withdrew their money from the bank, which led to its collapse.
The failure of SVB had a significant impact on the Silicon Valley economy. Many businesses that were reliant on the bank for financing were forced to close, and thousands of jobs were lost. The failure also led to a loss of confidence in the financial system, which made it more difficult for businesses to get loans.
The Federal Deposit Insurance Corporation (FDIC) stepped in to insure the deposits of SVB customers. The FDIC also appointed a receiver to manage the bank's assets. The receiver is working to sell the bank's assets and repay its creditors.
The failure of SVB is a significant event in the history of the Silicon Valley economy. It is a reminder of the risks that banks face and the importance of regulation.