DodoFinance Breaking News Made For You!
Supervisor FDIC closed the doors to Silicon Valley Bank (SVB) on Friday. It was the largest bank failure in the United States in more than a decade. The bank was struggling with a massive loss of confidence and was unable to stem the outflow of customer funds as a result.
The first nail was hammered in SVP’s coffin on Wednesday. The bank later announced a $2.25 billion (€2.1 billion) new share issue. This was necessitated by a significant loss of $1.8 billion in the investment portfolio.
Greg Becker, CEO of parent holding company SVB Financial, called on his customers to “support the bank and keep calm because we’ve supported our customers for 40 years.” But the call fell on deaf ears.
Various influential venture capitalists, including tech billionaire Peter Thiel’s Founders Fund, advised their clients to take money out of SVB. This started a bank run, a glut of bank deposits as savers feared their money was no longer safe.
Investors also panicked. Shares in parent SVB Financial fell 60 percent on Thursday to their lowest level since September 2016. Silicon Valley Bank was valued at $40 billion last year.
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