Largest Bank Collapse Since 2008 !!!, 4027

Good afternoon, I’m Still reporting on the economy.

One of the nation’s largest banks, Silicon Valley Bank, was closed and then taken over this morning by bank regulators at the Federal Deposit Insurance Corporation after a large bank run started yesterday when the bank’s stock plunged by 60% after depositors surged to remove their money from the bank.

The FDIC has renamed the bank the Deposit Insurance National Bank of Santa Clara, (DINB} and transferred all insured customer deposits from the old bank into the new one. Each deposit was insured for up to $250,000. However, it remains unclear how many accounts exceeded the $250,000 limit.

DINB will resume operations on Monday, Mar. 13.

SVB faced swift outflows of customer deposits following its announcement of a $1.8 billion loss on asset sales due to increasing interest rates.

As the bank's stock plummeted on Thursday, notable venture capital funds urged companies to withdraw their deposits and hold at least 2 months of cash reserves because the venture capital-backed tech sector typically backs new enterprises that take many months to become profitable, so their cash burn rate is always a critical metric.

SVB was reportedly attempting to find a bigger bank to buy it, however that proved difficult as it was already the 16th largest bank in the nation, and the largest in the tech center of Silicon Valley with $209 billion in total assets and over $175 billion in total deposits.

The tech industry will feel the impact of SVB's collapse, which is the biggest bank failure since Washington Mutual's in 2008. Due to interest rate hikes by the Federal Reserve and a challenging economic climate, most major tech companies have been forced to lay off numerous employees to cut their burn rates.