Washington [US], March 11: Silicon Valley Bank (SVB), one of the most prominent lenders in the tech start-up world, went bankrupt on March 10, forcing the US government to intervene.
The New York Times ( NYT) reported that the Federal Deposit Insurance Corporation (FDIC), an independent agency of the US government, said on March 10 that it would take over SVB, the 40-year-old bank with headquarters. in Santa Clara County, California . This is the second largest bank failure in US history and the largest since the 2008 financial crisis .
The move puts nearly $175 billion in customer deposits at SVB, the 16th largest bank in the US, under regulatory control. However, the incident has not yet caused worries about more serious impacts in the financial sector or the global economy, according to the NYT .
SVB's demise came two days after a series of customers - mainly tech workers and companies backed by venture capital - simultaneously withdrew money at the bank. According to the Financial Times , in just one day, March 9, the total amount of money withdrawn reached 42 billion USD, equivalent to a quarter of the total deposit at SVB. At the same time, the bank's shares plunged amid a dramatic drop in the value of the investments they held that shocked Wall Street and depositors.
SVB's financial health was increasingly questioned this week after the bank announced plans to raise up to $1.75 billion to bolster its capital position amid concerns over the interest rates will continue to increase as well as the current state of the economy. But the fundraising effort failed and the bank was forced to find a way to sell itself, according to CNBC.
The bank, with $209 billion in assets at the end of 2022, worked with financial experts until Tuesday morning to find a buyer, sources familiar with the negotiations told the NYT . The FDIC did not announce the buyer of SVB's assets, which often happens when a bank is out of order in sequence.
SVB is one of the key financing channels for venture capital-backed companies. These companies have been hit hard over the past 18 months as the US Federal Reserve (Fed) repeatedly raised interest rates and made risky tech assets less attractive to investors. private. According to the AP, troubled companies have been advised to withdraw at least two months' worth of operating costs from SVB.
Source: ThanhNien Newspaper