The collapse of the Silicon Valley Bank is the biggest retail banking failure since 2008 and the second biggest banking failure in America’s history, following Washington Mutual’s collapse. This SVB Crisis had such an impact that it forced the closure of another bank, New York’s Signature Bank. But how did this all happen? What went wrong with Silicon Valley Bank? What are the American regulatory bodies doing to fix this? And most importantly, what is the impact of this crisis on India? Watch this video by Dhruv Rathee to find out!

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The global financial crisis of 2008 caused a massive downfall for the American banking industry. With the collapse of Lehman Brothers and the widespread failures of other banks, the crisis served as a harsh reminder of the fragility of the financial system.

In the midst of this crisis, Silicon Valley Bank, a leading American bank that primarily serves technology companies, also faced a major setback. In this article, we will explore the downfall of American banks, focusing specifically on the Silicon Valley Bank crash and its underlying causes.

The financial crisis of 2008 was caused by several factors, including the housing bubble, risky lending practices, and the lack of proper regulations in the financial sector. American banks, especially those involved in subprime lending, suffered the most severe consequences.

Silicon Valley Bank, which primarily served the technology industry, was not exempt from the crisis. In fact, it was the first American bank to report a major loss due to the crisis. The bank reported a net loss of $78.7 million in the second quarter of 2008, which was a significant decline from its earnings of $49.8 million in the same quarter of the previous year.

The decline in Silicon Valley Bank’s earnings was largely due to its exposure to the subprime mortgage sector. Silicon Valley Bank had made several investments in mortgage-backed securities that were subsequently downgraded by credit rating agencies. These investments led to significant losses for the bank and its clients.

The chief executive officer of Silicon Valley Bank, Ken Wilcox, attributed the bank’s losses to the ongoing financial crisis and the challenges it faced in the market. Wilcox stated that the bank was taking steps to manage its risk and strengthen its balance sheet.

In response to the crisis, the American government implemented several measures to stabilize the banking sector. The government created the Troubled Asset Relief Program (TARP), which provided financial assistance to struggling banks. Additionally, the government introduced new regulations to prevent similar financial crises from occurring in the future.

Despite the government’s efforts, the Silicon Valley Bank crash serves as a reminder of the dangers of risky lending practices and the need for proper regulations in the financial sector. The crisis also highlights the interconnectedness of the global financial system and the ripple effects of the failures of individual banks.

In conclusion, the downfall of American banks during the financial crisis of 2008 had a significant impact on the global economy. Silicon Valley Bank, a leading American bank that primarily serves the technology industry, was not exempt from the crisis. The bank’s exposure to the subprime mortgage sector led to significant losses for the bank and its clients. The Silicon Valley Bank crash serves as an example of the dangers of risky lending practices and the need for proper regulations in the financial sector.