Last Friday, the California Department of Financial Protection and Innovation (DFPI) announced the bankruptcy of Silicon Valley Bank, one of the largest US banks, which was the main creditor of Silicon Valley companies. Economists note that the rapid collapse of SVB was the largest bankruptcy of a financial institution in the United States since the 2008 crisis. As you know, on March 8, the bank announced the sale of shares worth $ 2.25 billion to strengthen the balance sheet and compensate for losses after an unsuccessful securities transaction. This caused panic among large venture capital firms, which recommended their clients to withdraw money from the bank. This caused SVB shares to collapse by 60% the next day. Against this background, the quotations of other American banks also began to decline, which led to a record decline in the S&P 500 Financials index by 4.1% since mid-2020. On the morning of March 10, due to a sharp drop in shares and capital outflow, the California regulator was forced to declare bankruptcy of the bank, without waiting for the closing of trading in the evening. Analysts note that depositors withdrew their money so rapidly that the bank became insolvent in a few hours. After the bankruptcy, the bank was placed under the management of the Federal Deposit Insurance Commission (FDIC), which will liquidate assets to repay debts to depositors and creditors. Silicon Valley Bank was one of the 20 largest American commercial banks and cooperated with almost half of all venture technology and healthcare companies in the United States. At the end of 2022, its total assets amounted to $209 billion.
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