US closes Silicon Valley Bank in biggest collapse since 2008

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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 possible contagion from America's biggest banking failure since the 2008 financial crisis.

People line up outside of the shuttered Silicon Valley Bank headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the US Federal Deposit Insurance Corporation. Justin Sullivan/Getty Images/AFP

Little known to the general public, SVB specialized in financing start-ups and had become the 16th largest US bank by assets: at the end of 2022, it had $209 billion in assets and approximately $175.4 billion in deposits. In front of the SVB headquarters on a rainy day in Santa Clara, California, nervous customers spoke in small groups wondering how they could withdraw their money as news spread of the government seizure.

But on Wall Street on Friday, shares in heavyweights Bank of America, Wells Fargo and Citibank seesawed, with US Treasury Secretary Janet Yellen expressing "concern" about the situation and saying she was "monitoring" a few banks. CNBC reported Friday that SVB was in talks with potential buyers after attempts to ride out the crisis on its own failed.

Before the closure, trading in SVB itself was halted Friday after the bank saw more than 60 percent of its value wiped out, following the disclosure it had lost $1.8 billion in securities sales in an effort to raise funds.

 

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