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SVB, which was formed in 1983 by former Bank of America managers Bill Biggerstaff, Robert Medearis, and Roger Smith, had its assets seized by US authorities. SVB specializes in providing funding for startup companies.
SVB collapsed following news of a potential bank run. This is where a large group of investors or customers withdraw their money simultaneously Federal regulators took the reins after learning that SVB could not remain afloat on its own.
SVB stock lost 70% of its market value while shares of big US banks fell down alongside it. Banks such as JPMorgan Chase, which ended Thursday trading more than 5% lower.
Wall Street announced on Friday that shares in Bank of America, Wells Fargo and Citibank seesawed, with US Treasury Secretary Janet Yellen expressing “concern” about the stock movements by saying she was “monitoring” a few banks.
The UK namesake of SVB UK released a statement saying it had not been affected by the chaos as it operated as a “standalone, independent banking institution”.
“Silicon Valley bank UK has been an independent subsidiary since August 2022 with a separate balance sheet to the SVB Financial Group and an independent UK Board of directors”, it told Sky News.
The collapse of SVB makes it the biggest retail bank to fail since 2008 which is when Washington Mutual collapsed.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: LUKE MOCHERMAN
PHOTO CREDIT: CNN