Silicon Valley Bank

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Ashley Tyrner opened an account with Silicon Valley Bank for her company, FarmboxRx, two years ago. She was setting out to raise venture capital and knew ...

notice, taped by the entrance, that said the regulator was in control. A trickle of customers walked up to Silicon Valley Bank’s branch in Menlo Park, Calif., on Friday afternoon and discovered that its doors were locked. Sydecar, a service that facilitates venture capital deals, shared a list of the banks it uses that were not affected. For part of Thursday, Brex received billions of dollars in deposits from several thousand companies, a person with knowledge of the situation said. Silicon Valley Bank was also a bank to more than 2,500 venture capital firms, including Lightspeed, Bain Capital and Insight Partners. Her despair was part of the fallout across the start-up ecosystem from the failure of Silicon Valley Bank. Butler said he had been prepared for a big crunch, given the doom and gloom swirling around the industry. “The first thing you think about is survival,” he said. The implosion rattled a start-up industry already on edge. Entrepreneurs raced to get loans to make payroll because their money was frozen at the bank. “It’s the worst 24 hours of my life.” [financial instability at the bank](https://www.nytimes.com/2023/03/09/business/silicon-valley-bank-investors-worry.html), she rushed to move FarmboxRx’s money into two other bank accounts.

US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits in the largest failure of a US bank since 2008.

"The average Joe should be fine," he added, but he said tech firms would likely find it even harder to raise money. "Silicon Valley Bank would not have lost money if they hadn't run out of cash to give back to their customers," he said. It now employs more than 8,500 people globally, though most of its operations are in the US. Even businesses without direct business were affected, like customers of Rippling, a firm that handles payrolls software and had used SVB. "I'm on my way to the branch to find my money right now. And then this morning, it was there. Shares saw their biggest one-day drop on record on Thursday, plunging more than 60% and fell further in after-hours sales before trading was halted. "It was pending. And then this happens." This is one of those moments," one start-up founder told the BBC. "The issue was that people wanted money and they didn't have it - they had it invested and those investments were down." US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits in the largest failure of a US bank since 2008.

California banking regulators close Silicon Valley Bank and appoint the Federal Deposit Insurance Corporation as receiver for later disposition of its ...

After the FDIC announcement, employees received an email from the company saying they would be contacted by officials about employment and compensation, according to a source who declined be identified. The White House on Friday said it had faith and confidence in US financial regulators, when asked about the failure of SVB. By Friday, the collapsing stock price had made its capital raise untenable and sources said the bank tried to look at other options, including a sale, until regulators stepped in and shut the bank down. “Access to the cash is the biggest problem for the majority of the companies here. The cash and the workflow, to be able to have the runway is critical.” Nelson said he was worried about the company’s ability to pay employees and cover expenses.

US regulators pulled the plug on Silicon Valley Bank on Friday in a spectacular move that sent global banking shares into turmoil, as markets fretted over ...

"Is this another mini wobble on this front or the start of something bigger? Tough to tell, but I would be stunned if there weren't many more casualties of this boom-and-bust cycle." "It's not a good situation.

Greg Becker, the chief executive officer who presided over the collapsed Silicon Valley Bank, joined the company three decades ago as a loan officer.

He also served as the chairman of the Silicon Valley Leadership Group from 2014 to 2017 and was a member of the U.S. In a I learned a lot about the institution. When his manager left to work for Silicon Valley Bank, Becker followed, he said in 2021 on a Bloomberg [podcast](https://podcasts.apple.com/us/podcast/greg-becker-on-the-innovation-business-podcast/id730188152?i=1000531961814). Just 24 hours earlier, Becker had [personally called](/business/finance/silicon-valley-bank-sell-stock-cope-with-cash-burn-2023-03-09/) clients to assure them their money with the bank was safe. [Silicon Valley Bank's website](https://www.svb.com/profile/greg-becker).

History is repeating itself. Today, California regulators shut down Silicon Valley Bank, a lender aimed at start-ups, technology firms, and wealthy individuals.

[lights on](https://twitter.com/bhargreaves/status/1634245897981665299) and [ensure that](https://twitter.com/pm/status/1634274092454150144) [their employees](https://twitter.com/alexmeshkin/status/1634251503019110401) [get paid](https://twitter.com/garrytan/status/1634286688922132481), and because of the risk of financial contagion. Because a lot of account holders are companies that are trying to keep the The financial system is much better capitalized than it was in 2007, yet the collapse of a bank such as SVB still seems like too much chaos for the financial system to handle and for the real economy to bear. That led to a dramatic increase in SVB’s books: The bank went from having $60 billion in deposits in 2020 to more than $200 billion in 2022. That might be the right call in this case. [It’s a Wonderful Life](https://www.theatlantic.com/business/archive/2016/12/its-a-wonderful-life-banking/511592/) [–](https://www.theatlantic.com/business/archive/2016/12/its-a-wonderful-life-banking/511592/) [type](https://www.theatlantic.com/business/archive/2016/12/its-a-wonderful-life-banking/511592/) [bank run](https://www.theatlantic.com/business/archive/2016/12/its-a-wonderful-life-banking/511592/). Thus, thousands of people have their money frozen while the government figures out whether and how to merge the bank with another institution, sell off SVB’s assets to get people their money back, or grant protection to deposits of more than $250,000. [full access](https://www.fdic.gov/news/press-releases/2023/pr23016.html) to their funds as of Monday, the FDIC said. In many cases, a large share of a bank’s account holders are fully covered by FDIC deposit insurance, because relatively few people keep more than $250,000 in their accounts. “Its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable.” The venture capitalists who made SVB such a big deal in the first place also played a role by In the near term, the biggest risk is that start-ups doing bread-and-butter banking with SVB might not be able to make payroll in the coming days and weeks, forcing them to miss paychecks or even announce furloughs or layoffs.

VC firms are urging their portfolio companies to move money out of embattled lender Silicon Valley Bank, fueling fears of a run on the tech-focused bank.

We are seeing other funds encouraging companies to withdraw their funds from SVB. Having funds frozen at SVB could be deadly for a money-burning startup, according to founders with accounts at the bank who spoke to CNBC on the condition of anonymity. In a note to founders Thursday, Hussein Kanji, Hoxton's founder partner, said: "We have seen some funds passing on a view that they remain confident in SVB. Even with funding rounds slowing, startups have had to keep burning through cash raised from earlier rounds to cover their overheads. debt securities, which have now fallen in price after the Fed's rate hikes. - Numerous VC funds are advising companies in their portfolios to move their funds out of Silicon Valley Bank to avoid the risk of being caught up in its potential failure.

Shutdown and takeover of bank by regulators can be traced to the Fed raising interest rates and risk-averse investors.

This spooked investors such as General Atlantic that SVB had lined up for the stock sale, and the capital raising effort collapsed late on Thursday. Its shares ended trading on the day down 60%, as investors fretted that the deposit withdrawals might push it to raise even more capital. As higher interest rates caused the market for initial public offerings to shut down for many startups and made private fundraising more costly, some Silicon Valley Bank clients started pulling money out to meet their liquidity needs.

The bank had $209 billion in assets at the end of 2022. Bank failures can come from various causes: fraud, bad lending or a mis-match of assets and liabilities.

So when it appeared to the corporate depositors that Silicon Valley Bank was in trouble, the smart and easy response was to withdraw money. Still, the publicly-available financials suggest to me that the bank was still solvent when it was closed—solvent but in trouble. Second, understand how quickly assets can be converted to cash to meet the creditors’ demands. Those assets have real value but cannot be converted into cash quickly, meaning that some depositors would not be able to get their money immediately. As more money left the bank, it probably sold off securities. Most banks put the bulk of their assets into loans, but most banks have many small depositors who won’t need their money suddenly. The 10-year treasury bond, for example, closed the year at 3.88% but hit 4.08% in early March. So Silicon Valley Bank put most of its asset into U.S. Unfortunately, the best yields are usually found on long-term bonds rather than short-term bills. A bank takes in deposits from customers, who could be individuals or businesses. Bank failures can come from various causes: fraud, bad lending or a mis-match of assets and liabilities. Most of their deposits came from large companies that were part of the tech sector.

Shares of SVB Financial Group, known as Silicon Valley Bank, tumbled for a second day Friday and weighed on the whole banking sector again.

Concern among founders and venture capital investors spiked earlier this week after Silicon Valley Bank surprised the market by announcing late Wednesday it needed to raise $2.25 billion in stock. "Falling VC funding activity and elevated cash burn are idiosyncratic pressures for SIVB's clients, driving a decline in total client funds and on-balance-sheet deposits for SIVB," wrote the Morgan Stanley analysts. The bank also previously reported more than $90 billion in held-to-maturity securities, which wouldn't necessarily incur losses unless it was forced to sell them before maturity to cover fleeing deposits. [Signature Bank](/quotes/SBNY/), which is known to cater to the crypto sector, declined 22% following a 12% tumble Thursday. As the Federal Reserve consistently raises interest rates, it is lowering the value of Treasurys. The shares were down another 62% in premarket trading Friday before they were halted for pending news. Peter Thiel's Founders Fund and other large venture capital firms asked its companies to pull their funds from SVB, [First Republic Bank](/quotes/FRC/) fell 15% following a 17% slide Thursday. - The shares were down another 62% in premarket trading Friday before they were halted. However, rapid deposit outflows outpaced the sale process, which made it difficult for any buyer to do a realistic assessment, Faber reported. They did not open for trading with the market at 9:30 a.m. The failure raised fears more banks would incur heavy losses on their bond portfolios.

The implosion of Silicon Valley Bank could force hundreds of tech startups to lay off workers or shut down completely. It remains unclear how much, if any, ...

"At this time, the company does not know to what extent the company will be able to recover its cash on deposit at SVB," officials at Roku wrote of what amounts to about 26% of the company's cash. "This can be an existential risk to competition and innovation in the American economy for the next decade." Any amount above that will result in a "receivership certificate." "Venture capital funding had already been in a contraction mode," Tan said. "We woke up this morning hoping the money would be in that JPMorgan bank account, and it was not." Eventually, Silicon Valley Bank would come to do business with nearly half of all U.S. Will they have to take out personal loans to keep the business running? Do they have to furlough workers?" Stefan Kalb was in the middle of a meeting around 1 p.m. While he declined to provide the exact amount, he noted that Shelf Engine has raised more than $60 million from investors. "It's these services that startups couldn't get elsewhere." The following day, it was under water.

In a major event investors and depositors tried to pull $42 billion from Silicon Valley Bank on Thursday in one of the biggest US bank runs in more than a ...

The scale of attempted withdrawals was so large that the bank ran out of cash and ways to get it. In a major event investors and depositors tried to pull $42 billion from Silicon Valley Bank on Thursday in one of the biggest US bank runs in more than a decade, according to a Friday regulatory filing. The order shines light on the scale of the bank run faced by the lender, which was placed into Federal Deposit Insurance Corp.

Future payments of remaining uninsured deposits will occur as the FDIC liquidates additional assets. Information about the SVB receivership, how to file claims ...

Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships, as explained at Other affiliates of a bank that is in receivership may be subject to other bankruptcy or insolvency regimes, which may include the Bankruptcy Code. Uninsured deposits rank third in right of payment behind the FDIC in respect of its administrative expenses and the payment of insured deposits, ahead of all other creditors. The FDIC announced on March 10 that insured depositors will have access to their insured amounts by Monday morning, March 13, 2023, and that uninsured depositors will be paid an advanced dividend next week and will receive a receivership certificate for their additional uninsured deposits (which is not a guarantee of full repayment). FDIC insurance covers certain deposit accounts in an amount of up to $250,000 per depositor for the aggregate of all deposits held by the depositor in each account ownership category. Future payments of remaining uninsured deposits will occur as the FDIC liquidates additional assets.

It's safe to say, though, that none of the disaster scenarios envisaged the kind of financial implosion that struck this week at SVB Financial, the parent ...

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Dozens of young Indian startups backed by the likes of YC, Accel, Sequoia India, Lightspeed, SoftBank and Bessemer Venture Partners banked with Silicon Valley ...

DealBook unpacks what caused the biggest U.S. bank failure since the 2008 financial crisis — and what might come next.

Here’s an interesting discussion from the Vulture podcast “Into It” about why the Oscars [aren’t rewarding blockbusters](https://www.vulture.com/2023/03/will-the-oscars-reward-blockbuster-movies.html). (The Economist) [“M*A*S*H” episode](https://clear-vivid-with-alan-alda.simplecast.com/episodes/alan-chats-with-the-bots)for Alan Alda and Mike Farrell, stars of the 1970s TV comedy, to read. [rethinking the ceremony](https://www.nytimes.com/2023/03/09/business/media/academy-awards-broadcast.html)to hold on to viewers — and preserve its own future. Gulden didn’t have to travel far; Puma and Adidas are based in the same Bavarian city, Herzogenaurach. [an Italian highway](https://www.instagram.com/p/CRlFry4LQls/), A24 had the same ambitions as predecessors like Miramax: Produce critically lauded hits. The rub is what possible suitors think about spending on a studio whose movies have never been financial home runs, in an age of increasingly tight budgets. There will be a detailed post-mortem of the bank’s failure in the coming weeks and months. The bank’s management — with the help of Goldman Sachs, its adviser — chose to raise new equity from the venture capital firm General Atlantic and also to sell a convertible bond to the public. The Luxembourg-based firm spent billions to acquire stakes in the commercial arm of La Liga, Spain’s leading soccer league; the Indian Premier League cricket competition; and the Six Nations rugby tournament. That left time for investors — and, more important, clients — to start scratching their heads and sow doubt about the firm, leading to an exodus of deposits. [sell $21 billion of bonds at a $1.8 billion loss](https://www.reuters.com/business/finance/what-caused-silicon-valley-banks-failure-2023-03-10/), in large part, it appears, because many of those bonds were yielding an average of only 1.79 percent at a time when interest rates had risen drastically and the bank was starting to look like an underperformer relative to its peers.

CEO Greg Becker personally led the bank's half-million-dollar push to reduce scrutiny of his institution – and lawmakers obliged.

Becker [left the board](https://www.investing.com/news/stock-market-news/ceo-of-failed-silicon-valley-bank-no-longer-a-director-at-sf-fed-3027959?ref=the-lever) on Friday. [wrote](https://www.federalreserve.gov/SECRS/2019/August/20190806/R-1658/R-1658_062119_134209_447374886406_1.pdf?ref=the-lever) in a comment on the Federal Reserve’s proposal. [appeared before a Senate panel](https://www.govinfo.gov/content/pkg/CHRG-114shrg94375/pdf/CHRG-114shrg94375.pdf?ref=the-lever) to push legislators to exempt more banks – including his own – from new regulations passed in the wake of the 2008 financial crisis. [Senate](https://www.senate.gov/legislative/LIS/roll_call_votes/vote1152/vote_115_2_00054.htm?ref=the-lever) by 50 Republicans and 17 Democrats, including the Democratic Virginia Senator Mark Warner, for whom Becker held a fundraiser at his Menlo Park, California, home in 2016, according to an [invitation](http://politicalpartytime.org/party/41385/?ref=the-lever) obtained by the Sunlight Foundation and OpenSecrets. Recall that the smallest among this class of banks is over twice the size of the $50bn banks that automatically required enhanced prudential regulation under the Dodd-Frank Act as originally enacted.” “Given the low risk profile of our activities and business model, such a result would stifle our ability to provide credit to our clients without any meaningful corresponding reduction in risk.” [elected](https://www.frbsf.org/our-district/press/news-releases/2019/leadership-and-membership-announcements-board-of-directors/?ref=the-lever) to serve on the board of directors at the Federal Reserve Bank of San Francisco. The bank’s political action committee also donated a total of $10,000 to Warner’s campaigns in the [2016](https://www.opensecrets.org/political-action-committees-pacs/silicon-valley-bank/C00333658/candidate-recipients/2016?ref=the-lever) and [2018](https://www.opensecrets.org/political-action-committees-pacs/silicon-valley-bank/C00333658/candidate-recipients/2018?ref=the-lever) election cycles. The bank [federal](https://lda.senate.gov/filings/public/filing/40f1aec7-9dbf-46da-a20e-2ce2f5af80cc/print/?ref=the-lever) [disclosure](https://lda.senate.gov/filings/public/filing/1a82c199-21a1-447c-98ca-78decd6cc97e/print/?ref=the-lever) [records](https://lda.senate.gov/filings/public/filing/e5be3075-8267-42a0-8aa2-aa1725d4e7d4/print/?ref=the-lever) [show](https://lda.senate.gov/filings/public/filing/276fe661-9582-4f96-995d-151d133db5e2/print/?ref=the-lever) the bank was lobbying lawmakers on “financial regulatory reform” and the Systemic Risk Designation Improvement Act of 2015 – a bill that was the precursor to [legislation](https://www.congress.gov/bill/115th-congress/senate-bill/2155/text?ref=the-lever) ultimately signed by President Donald Trump that increased the regulatory threshold for stronger stress tests to $250bn. [published](https://www.levernews.com/svb-chief-pressed-lawmakers-to-weaken-bank-risk-regs/) in the Lever [reportedly](https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/?ref=the-lever) did not have a chief risk officer in the months leading up to the collapse, while more than [90% of its deposits](https://twitter.com/business/status/1634211584657571843?s=20&ref=the-lever) were not insured.

Employees of Silicon Valley Bank were offered 45 days of employment at 1.5 times their salary by the Federal Deposit Insurance Corp, the regulator that took ...

The frenetic two-day run on the bank [blindsided observers and stunned markets](/markets/us/global-markets-banks-sector-analysispix-2023-03-11/), wiping out more than $100 billion in market value for U.S. at the end of last year, with about $209 billion in assets and $175.4 billion in deposits. SVB ranked as the 16th biggest bank in the U.S. [rushed to withdraw](/markets/us/silicon-valley-banks-demise-began-with-downgrade-threat-sources-2023-03-11/) their deposits. SVB had a workforce of 8,528 at the end of last year. Register for free to Reuters and know the full story

Moody's Investors Service delivered alarming news to SVB Financial, parent of Silicon Valley Bank: It was preparing to downgrade the bank's credit.

The FDIC will dispose of its assets. Its lawyers advised the bank that investors would need at least 24 hours to digest new downbeat financial projections and complete the sale, the sources said. SVB's stock plunged on news of the share sale, ending Thursday down 60% at $106.04. News of the share sale spooked clients, primarily technology startups, that rushed to withdraw their deposits, upending the capital raising. It would sell more than $20 billion worth of low-yielding bonds and reinvest the proceeds in assets that deliver higher returns. The failure also sent shockwaves through California's startup economy, with many companies unsure of how much of their deposits they can recover and worrying about how to make payroll.

Traders have been watching this week for signs of contagion in the financial sector from developments surrounding startup-focused Silicon Valley Bank and ...

cryptocurrency firm Circle has $3.3 billion of its $40 billion of USD Coin reserves at the collapsed lender Silicon Valley Bank, the company said in a tweet on Friday. Circle said in another tweet on Friday that it and USDC continue to operate normally while it waits to see how SVB's receivership will affect its depositors, while several crypto companies took to Twitter to deny any exposure to the collapsed SVB. cryptocurrency firm Circle said it has $3.3 billion of its $40 billion of USD Coin reserves at the collapsed lender Silicon Valley Bank.

LONDON, March 11 (Reuters) - By Elizabeth Howcroft and Rishabh Jaiswal. Stablecoin USD Coin (USDC) lost its dollar peg and slumped to an all-time low on ...

The largest, Tether, has a market cap of $72 billion, according to CoinGecko. USDC is the second-biggest stablecoin with a market cap of $37 billion. Stablecoin USD Coin (USDC) lost its dollar peg and slumped to an all-time low on Saturday after Circle, the U.S. bank failure since the 2008 financial crisis, roiling global markets and stranding billions of dollars belonging to companies and investors. USDC's price usually holds close to $1, making Saturday's drop unprecedented. It recovered slightly to trade around $0.90 by 1120 GMT.

The announcement from Circle overnight on Friday prompted the company's USDC crypto token to lose its peg to the dollar. US exchange Coinbase said it was ...

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HONG KONG -- The Chinese joint venture of defunct lender SVB Financial Group assured the public its operations were "sound" Saturday, saying.

Stablecoin USD Coin (USDC) lost its dollar peg and slumped to an all-time low on Saturday after Circle, the US firm behind the coin, revealed some of the ...

The largest, Tether, has a market cap of $72 billion, according to CoinGecko. USDC is the second-biggest stablecoin with a market cap of $37 billion. USDC’s price usually holds close to $1, making Saturday’s drop unprecedented. It recovered slightly to trade around $0.90. [tweet](https://twitter.com/circle/status/1634341007306248199) Friday it and USDC “continue to operate normally” while the firm waits for clarity on what will happen to Silicon Valley Bank depositors. [collapsed lender Silicon Valley Bank](http://www.cnn.com/2023/03/11/business/svb-collapse-roundup-takeaways/index.html), the company said in a [tweet](https://twitter.com/circle/status/1634391505988206592) Friday.

The implosion of the Silicon Valley bank led to finger-pointing, as executives and investors jumped on the crisis for their own messaging.

Silicon Valley Bank appears to have had a relatively small footprint in the crypto industry. “There’s no crypto regulator insuring accounts for $250,000,” said Danny Moses, an investor at Moses Ventures who is known for his role in predicting the 2008 crisis in “The Big Short.” The fact that the F.D.I.C. “If this was an unregulated crypto bank, then the money could just disappear,” Mr. It became insolvent after investors and depositors caused a run on its holdings, the order said. The news set off fear in the tech industry, as start-ups rushed to get their money out. In November, FTX, the crypto exchange run by A so-called stablecoin designed to maintain a constant value of $1 suddenly dipped in price, sending shudders through the market. But crypto executives and investors — who have endured a year of near-constant upheaval — seized on the moment to preach and scold. And the finger-pointing went in both directions. [said](https://twitter.com/jaredgrey/status/1634341626121187330). Their vision of an alternate financial system, unmoored from big banks and other gatekeepers, was [better](https://twitter.com/ErikVoorhees/status/1634011983853895681).

Silicon Valley Bank has joined the cemetery of failed banks due to its self-inflicted wounds. No amount of finger pointing will absolve CEO Greg Becker, ...

According to SVB’s [10-K](https://s201.q4cdn.com/589201576/files/doc_financials/2022/q4/f36fc4d7-9459-41d7-9e3d-2c468971b386.pdf), “As of December 31, 2022, and December 31, 2021, the amount of estimated uninsured deposits in U.S. Thanks to all those politicians and bank lobbyists who fought hard to lower risk management requirements for banks under $250 billion assets, SVB was not required to disclose how much it had in high quality liquid assets to help it cover net cash outflows in a period of stress. Significant higher growth in assets is also a good time to examine whether a bank’s technology is up to the task of taking in significant amounts of data to price assets and to measure their credit, market, and liquidity risks. He had all of 2022 to see up close and personal all the funding and liquidity problems that his company was having. Such a rapid and large rise in deposits should always make risk managers test what would happen to the bank’s liquidity when depositors decided to leave as quickly as they came in. Its high levels of deposits from traditionally riskier companies meant that if any had liquidity problems there was always the risk that they could come rapidly en masse to withdraw their deposits. What more of a signal does a bank need to conduct interest rate sensitivity analysis and stress tests on their bond holdings? They repeatedly told us that they were bankers to technology, start-up companies, and venture capital firms. Anyone who does not take interest rate risk sensitivity analysis and stress tests seriously as part of a Gap Analysis does not belong in banking. From a credit perspective, SVB’s loans and bonds were of a good credit quality; their data showed a low probability of default. Loans alone grew almost 114% from 2019 to 2020 and then almost 30% from 2020 to 2021. Yet, even looking at aggregated data about SVB, a number of signs would have told investors, lenders, and credit analysts that SVB had problems.

Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.

Reassurances from the bank's executives were not enough to stop a run, and depositors withdrew more than $42 billion by the [end of the day Thursday](https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFPI-Orders-Silicon-Valley-Bank-03102023.pdf), setting up the second-largest bank failure in U.S. [argued](https://mobile.twitter.com/Scaramucci/status/1634520661803630592), "It isn't a political decision to bailout SVB. [$2.25 billion](https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html) to shore up its balance sheet, and that it had sold all its available-for-sale bonds at a $1.8 billion loss. [lengthy tweet](https://twitter.com/BillAckman/status/1634564398919368704), writing, "The gov't has about 48 hours to fix a-soon-to-be-irreversible mistake. AND make the too big to fail problem way worse." But the firm itself faced cashflow problems this year as startup financing dried up and its own assets were locked down in long-term bonds. [wrote](https://twitter.com/ericvishria/status/1634414149882232832), "If SVB depositors aren't made whole, then corporate boards will have to insist their companies use two or more of the BIG four banks exclusively. By allowing [@SVB_Financial](https://twitter.com/SVB_Financial) to fail without protecting all depositors, the world has woken up to what an uninsured deposit is — an unsecured illiquid claim on a failed bank. Do this before Monday open or there will be contagion and the crisis will spread." These banks are not deemed "too big to fail" and do not have to undergo regular stress tests or other safety valve measures passed in the wake of the 2008 financial crisis. Many of these depositors are startups, and many are concerned that they will not be able to make payroll this month, which in turn could spark a wide wave of failures and layoffs in the tech industry. [writing on Twitter](https://twitter.com/DavidSacks/status/1634292056821764099), "Where is Powell?

What can the collapse of Silicon Valley Bank teach us about the tech industry? On one level, not much. It's true that S.V.B., as tech insiders called it, ...

was a small bank by Wall Street standards (it was the 16th-largest bank in the country, with around $200 billion in assets as of January), it occupied a privileged place in the tech community. Relationships like those are valuable, and the most likely scenario here is that in the near future, a big Wall Street bank will acquire Silicon Valley Bank out of receivership. They’re start-up founders and investors, the kinds of people who scrutinize banks’ securities filings, who pay close attention to risk and volatility and who (most importantly) talk to each other on the internet all day. If a big bank acquires S.V.B., will it be as friendly to start-ups as S.V.B.? Are there other banks with ties to the tech industry that are vulnerable to interest-rate risk, the way S.V.B. In this case, S.V.B.’s demise seems to have been hastened by the clubby, A worse scenario — one in which no buyer emerges, the bank’s customers have to wait weeks or months to access their money and the entire start-up ecosystem collapses because many cannot make payroll — could be catastrophic. It’s true that S.V.B., as tech insiders called it, was a Silicon Valley institution, and that it counted many of the tech industry’s best-known start-ups and investment firms as its clients. Venture capital investors got spooked, and [told their portfolio start-ups](https://www.bloomberg.com/news/articles/2023-03-09/founders-fund-advises-companies-to-withdraw-money-from-svb) to withdraw any money they had sitting at S.V.B. needed to sell some of its bonds at a loss and seek fresh capital to meet its obligations. It’s also true that the bank’s failure will have ripple effects throughout the tech sector in the short term, as companies that kept their money there [badly](https://twitter.com/lulumeservey/status/1634232322693144576)) what had happened, some of those customers got worried that the bank was in trouble.

How did we get here? SVB Financial is the parent company of Silicon Valley Bank, which counts many startups and venture-capital firms as clients. During the ...

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Musk is watching the Silicon Valley Bank failure with interest as he works to enable payments on Twitter.

[planning to build his own town](https://www.wsj.com/articles/elon-musk-texas-town-52386513) along the Colorado River outside of Austin, Texas. [tweeted](https://twitter.com/realMeetKevin/status/1634377161195896832https://twitter.com/realMeetKevin/status/1634377161195896832) Kevin Paffrath, CEO of HouseHack, a real-estate and A.I. China’s WeChat offers an example of such an app, featuring payments [in addition to](https://fortune.com/2022/10/15/elon-musk-twitter-everything-app-x-wechat-america-china/) messaging, streaming, and video chats, among much else. According to the Wall Street Journal, Musk is Musk sold billions worth of Tesla stock to help finance his takeover of Twitter and has been preoccupied with reshaping the platform. Tesla needs and deserves to have working full time CEO.” No thanks!” [tweeted](https://twitter.com/elonmusk/status/1577428272056389633https://twitter.com/elonmusk/status/1577428272056389633) earlier that month. “2-3 years to get a banking charter otherwise. Just make sure you go through those toxic assets with a fine-tooth comb.” [tweeted Friday](https://twitter.com/mpawlo/status/1634282873665605643). [replied](https://twitter.com/elonmusk/status/1634374859043270678), “I’m open to the idea.”

Hedge funds are offering to buy startup deposits stranded at Silicon Valley Bank (SVB) for as little as 60 cents on the dollar, Semafor reported on Saturday ...

The frenetic two-day run on the bank [blindsided observers and stunned markets](/markets/us/global-markets-banks-sector-analysispix-2023-03-11/), wiping out more than $100 billion in market value for U.S. [rushed to withdraw](/markets/us/silicon-valley-banks-demise-began-with-downgrade-threat-sources-2023-03-11/) their deposits. Register for free to Reuters and know the full story

SACRAMENTO — Governor Gavin Newsom today issued the following statement in response to the appointment of the Federal Deposit Insurance Corporation (FDIC) ...

Amid all the bad news, there is a ray of hope for some workers. Employees of SVB, according to Reuters, were offered 45 days of employment at 1.5 times ...

Silicon Valley tech companies and other businesses will put hiring on the back burner and lay off personnel to cut costs if things worsen. The FDIC, the U.S. There are concerns that a contagion effect will occur if customers pull their money out of other banks in a similar shape to SVB. The bank announced plans to raise about $2.3 billion in fresh capital to remain solvent and keep the doors open. Yellen said she had the "full confidence in banking regulators to take appropriate actions in response and noted that [the banking system remains resilient](https://www.bbc.com/news/business-64915616)," the BBC reported. This fact raises the disturbing possibility that venture capitalists, startups and an array of other people and businesses may not get back all of their funds. The sudden imposition of Silicon Valley Bank struck fear in their customers. [closely monitoring the developments](https://www.bbc.com/news/business-64915616) unfolding at SVB and other banks. Their jobs are to monitor, conduct surveillance, audit, oversee, and examine banks to ensure the safety of their customers and their money. The prior 8,528 SVB employees will be onboarded this weekend to an “Employee Retention” project and offered benefits, including healthcare, by SVB. There was no comment about whether or not the employees will stay longer than the current program. Amid all the bad news, there is a ray of hope for some workers.

The collapse of Silicon Valley Bank has echoes of the federal Washington Mutual takeover, but the economy is in a much different place now than it was in ...

Rogoff said he’s confident the government would avoid “a total meltdown of start-ups in Silicon Valley,” but he wonders what’s to come after the latest large U.S. The falls of Washington Mutual and Silicon Valley Bank differ in many ways, one of which is that WaMu catered to lower- and middle-income customers that other banks deemed too risky. “A notable difference is the speed at which this happened with SVB,” Reyes said. Ritter, professor of finance at the University of Florida, told The Post that the concerns this week are far different compared to the dynamic of 2008 with subprime mortgage loans and people spending beyond their means. That uncertainty was echoed by Derrick Reyes, who says he had a personal account at Washington Mutual and a business account at Silicon Valley Bank. 25, 2008, the federal government seized control of Washington Mutual and placed it into receivership of the Federal Deposit Insurance Corp. “The government limited the ability of WaMu to borrow cash from the Federal Home Loan Banks, and that led to their liquidity,” said Joseph Lynyak, a banking attorney at the D.C. (In a “run,” depositors pull their money in fear that the bank may become insolvent.) In the process, Washington Mutual was shaping into what The company endeared itself to customers through a family-centric slogan — “The Friend of the Family” — and quirky commercials. The bank, which changed its name in 1917, survived the Great Depression and eventually expanded across the country, from the West Coast to New York. financial system is reeling from the second-largest bank failure in the country’s history.

The Federal Deposit Insurance Corporation (“FDIC”) has been appointed as the receiver. To protect insured depositors, the FDIC created the Deposit Insurance ...

We anticipate clients adversely affected by the SVB collapse will need immediate guidance with regard to navigating: (i) how to submit a claim to the FDIC; (ii) how to address and solve for immediate financial operating issues (i.e. Some of our publicly traded clients – who may have funds tied up at SVB, or not- should immediately consider whether a public filing may need to be made – i.e. A determination needs to be made as to whether the account is a deposit account, a sweep account, or a non-deposit investment account. While fully insured deposits are paid promptly after the failure of the bank, the disbursements of uninsured funds may take place over several years based on the timing in the liquidation of the failed bank assets. In the case of a non-delinquent loan, the depositor might elect to “set off” the loan against his/her deposits in order to receive full value for any uninsured funds (i.e., funds in excess of the $250,000 insurance limit). In the case of a delinquent loan, the FDIC will “set off” the loan against the borrower’s deposits (if any) before paying deposit insurance. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers. The FDIC as receiver will be looking for a purchaser or purchasers to acquire some or all assets of Silicon Valley Bank. revolvers, term loans, letters of credit) will likely not be able to draw down on their existing lines of credit with SVB. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (“DINB").

The stablecoin fell as low as $0.87 as Circle broke the news that its reserves were at the collapsed lender.

The largest, Tether, has a market cap of $72bn, according to CoinGecko. It abruptly collapsed after failing to raise money to meet withdrawal demand after saying it had sold about $21bn of securities from its portfolio, resulting in a $1.8bn loss for the first quarter. USDC is the second-biggest stablecoin with a market cap of $37bn . USDC’s price usually holds close to $1, making Saturday’s drop unprecedented. But the coin broke its 1:1 dollar peg and fell as low as $0.87 on Saturday morning. It was later reported that SVB did not have a chief risk officer in place in the months leading up to the collapse, while more than 90% of its more than $212bn in deposits were not insured.

Across the Atlantic, startup companies woke up Saturday to find that Silicon Valley Bank's U.K. business will stop making payments or accepting deposits.

"If the government allows people to take at least half of the money they have in Silicon Valley Bank next week, I think everything will be fine," Varsavsky said Saturday. "And so we all did that, hence the bank run." "We know that there are a large number of startups and investors in the ecosystem who have significant exposure to SVB UK and will be very concerned," Dom Hallas, executive director of Coadec, which represents British startups, said on Twitter. Such actions accelerated the flight of cash, which led to the bank's collapse. "They really understand the wine business," Hirsch said. The U.S. That could force him into a decision about whether to begin furloughing employees until the mess is cleaned up. Regulators are trying to find a buyer for the bank in hopes customers with more than that can be made whole. Across the Atlantic, startup companies woke up Saturday to find SVB's U.K. That includes customers like Circle, a big player in the cryptocurrency industry. customers with less than $250,000 in the bank can count on insurance provided by the Federal Deposit Insurance Corp. It's not just startups feeling the pain.

While I hope for the best for companies banking with SVB, it's important for founders and CEOs to plan for the worst.

Silicon Valley Bank's stunning collapse has led to the freezing of tens of billions of dollars stored there by startups and their private equity backers, ...

He warned that “years of US innovation” are on the line, as an entire “generation of American startups” could be destroyed in a month or two. Bennett added that an intervention should not be viewed as “bailing out ‘The 1’ or ‘Big Tech’,” pointing to the “thousands of the most hardworking, talented individuals” at impacted companies who are currently “struggling.” “The real victims of the SVB fallout are the depositors: startups with 10 to 100 employees, who cannot make payroll, and will have to furlough or shutdown workers as soon as Monday,” tweeted Garry Tan, head of the well-known incubator Y Combinator. The company previously boasted that “nearly half” of technology and life science companies that had US funding banked with them, leading many to worry about the possible ripple effects of its collapse. The FDIC said Friday that all accounts would quickly get access to the insured portions of their deposits, but that the rest would depend on how much is recovered from sales of the bank’s assets, an often lengthy process. The company, whose website says it is “the financial partner of the innovation economy,” was taken over Friday by the US Federal Deposit Insurance Corporation (FDIC) to prevent further damage.