Silicon Valley Bank (SVB), a large bank catering to the technology industry, has collapsed after a bank run, amid fears over its financial health, becoming the largest bank failure in the US since 2008.
It had provided its services to venture capital-backed technology and life-science companies, and to over 2,500 venture capital firms.
The bank's swift collapse sent shockwaves through the tech industry, Wall Street, and Washington, as many tech companies used it to hold their cash, leading to an influx of deposits during the pandemic.
The collapse of SVB instigated emergency measures from government agencies from around the world to backstop the financial system and shore up confidence in the global financial system.
Silicon Valley Bank (SVB), a California-based bank that catered exclusively to the tech sector, has collapsed, becoming the largest bank failure in the US since Washington Mutual in 2008.
Reports suggest that depositors began withdrawing funds en masse after doubts over the bank's financial stability began to spread, eventually leading to a bank run.
Many tech companies used SVB as their preferred bank, leading to an influx of deposits.
The initial market shock of Covid-19 in early 2020 quickly gave way to a golden period for startups and established tech companies, as consumers spent big on gadgets and digital services.
According to Al Jazeera, "financial regulators around the world have raced to contain the fallout of SVB's collapse, the biggest bank failure in the US since 2008, and shore up confidence in the global financial system."
What makes the collapse noteworthy is that SVB was the preferred bank for the tech sector whose services were in hot demand throughout the pandemic years.
The initial market shock of Covid-19 in early 2020 gave way to a golden period for startups and established tech companies, as consumers spent big on gadgets and digital services, and many tech companies used SVB to hold the cash they used for payroll and other business expenses.
According to The Guardian, SVB's ill-fated investment decisions led to its collapse.
Different news sources focus on various aspects of the collapse.
While The Independent notes that "President Joe Biden is reassuring Americans that the money they have in banks is safe," The Guardian points out SVB's rise and fall, while also noting that the bank had been experiencing difficulties due to its investment decisions.
AP News focuses on the collapse of two large banks that cater to the tech industry and the emergency measures taken by government agencies to backstop the financial system.