The Collapse of Silicon Valley Bank and What Comes Next

by | Dec 17, 2023 | Bank Failures | 23 comments

The Collapse of Silicon Valley Bank and What Comes Next




The federal government stepped in to make all depositors at Silicon Valley Bank whole after the bank’s stunning collapse over the weekend. Ana Kasparian and Cenk Uygur discuss on The Young Turks. Watch TYT LIVE on weekdays 6-8 pm ET.

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“U.S. regulators took control of a second bank Sunday and announced emergency measures to ease fears depositors might pull their money from smaller lenders after the swift collapse late last week of Silicon Valley Bank.

The measures, which include guaranteeing all deposits of SVB, were designed to shore up wavering confidence in the banking system. They were jointly announced Sunday night by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp.”*

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Silicon Valley Bank, once a vibrant and successful financial institution, has experienced a dramatic collapse in recent months. The bank, which was known for its focus on providing banking services to innovative and technology-focused companies, has faced numerous challenges that have ultimately led to its downfall.

There are several key factors that have contributed to the collapse of Silicon Valley Bank. The first and most significant factor is the bank’s heavy reliance on the technology sector. As the technology market experienced a significant downturn, many of the bank’s clients were forced to scale back their operations or shut down entirely. This resulted in a substantial decrease in the bank’s loan portfolio and a significant increase in nonperforming loans.

In addition to the challenges in the technology sector, Silicon Valley Bank also faced considerable regulatory and compliance issues. The bank was the subject of multiple investigations and lawsuits related to its lending practices and risk management. These legal issues not only tarnished the bank’s reputation but also required significant financial resources to address, further straining the bank’s balance sheet.

Furthermore, Silicon Valley Bank had made several high-risk investments that resulted in significant losses. The bank’s high exposure to risky assets, combined with a lack of diversification in its investment portfolio, ultimately led to significant financial losses and a depletion of the bank’s capital reserves.

As a result of these challenges, Silicon Valley Bank was unable to meet its financial obligations, leading to its collapse. The bank was ultimately placed into receivership, and its assets were seized by the Federal Deposit Insurance Corporation (FDIC).

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So, what’s next for Silicon Valley Bank and its clients? The FDIC will work to facilitate the transfer of the bank’s assets and liabilities to another financial institution. This process will ensure that the bank’s clients are able to access their deposits and that any outstanding loans are managed by a new institution.

For Silicon Valley Bank’s clients, it is crucial to consider their options moving forward. Many clients will likely opt to transfer their accounts to the acquiring institution, while others may choose to seek banking services elsewhere. It is essential for clients to carefully evaluate their options and choose a financial institution that is stable, financially sound, and able to meet their specific banking needs.

The collapse of Silicon Valley Bank serves as a cautionary tale for financial institutions that are heavily reliant on a specific sector or industry. It underscores the importance of diversification in a bank’s loan portfolio and investment strategy, as well as the need for robust risk management and compliance practices.

In the wake of Silicon Valley Bank’s collapse, the financial industry will undoubtedly undergo increased scrutiny and regulation to prevent similar circumstances from occurring in the future. It is crucial for banks and financial institutions to learn from the mistakes that led to the downfall of Silicon Valley Bank and take proactive steps to strengthen their operations and ensure their long-term viability.

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23 Comments

  1. @jamespratt7691

    I wany are posy offices expanded to do basic banking

  2. @mmhmm-

    I dont her why ana and cenk keep saying the average joe will get hurt if they got their money back the ones who got effected was the millionaires who are coming the system

  3. @apollothirteen9236

    Only depositors who had 250k or more in the bank should be made whole.

  4. @apollothirteen9236

    Working class people caused it. They need to pay for it.

  5. @zengara11

    This is why the crash happened in 2007, they deposite their money, the money turns into investment, and then that "investment" is used on insanely risky house loans. Basically imagine thousands/millions of people is promised a house each, if 1 person does not pay for the loan…….. They are still doing it

  6. @darnellcapriccioso

    Considering the recent developments involving SVB, Signature Bank, and First Republic Bank, reminiscent of the 2008 market crash, is it prudent to continue saving in the United States dollar? Alternatively, would it be wise to contemplate investing in gold amidst these circumstances?

  7. @mnemosynevermont5524

    Let's talk about usurious credit card interest rates.

  8. @jamesharrison6569

    Silicon Valley Bank (SVB) was the 16th largest bank in the US, and it wasn't subject to the most strict controls. How many banks actually are subject to those controls, besides the big four? Any bank could suffer a run and fail, and if that happens to a community level or even state level bank it probably won't upset the national economy or ecosystem of banks, but any multi-state bank should be more closely watched.

  9. @mariacatlow4791

    Unlike personal banking, SVB's clients had much larger accounts. It didn't take long for money to diminish during the bank run, with the escalating pace of withdrawals causing a snowball effect. Most customers had deposits more than the $250,000 FDIC limit.

    I must Crypto currency investment projects seems to be more reliable than this so called bank. I am so disappointed at them for just not letting their investors to access there money anymore.

    I must confess i'm absolutely glad and grateful to God i found the right platform who's method are top notch and profitable.

    All thanks to Bonaveststockfx.

  10. @SavantApostle

    Banks: you need at least 6 mo of living expenses in your savings account in case of emergencies.

    Also banks: we invest all our money and hope nothing bad happens, agian. And we lost your money.

  11. @lisamoore3198

    I’ve been through so much these past years to the point where I just gave up and laid there for weeks waiting to get better, but I knew nothing would get better and I’m just stuck in one place or just repeating a lot of stuff that happened that I knew would not get better, but one day I just decided to get away from the things that hurt me and try to be as happy as I can be and make the best of it.
    I say a big thank you to bonaveststockfx for being reliable when it comes to crypto currency investment.
    This is more reliable than this so called bank that ran away with our money.

  12. @MarcoPolo-oy3mh

    What happened to SVB is really scary, and goes to show that no corporation, however big, is immune to collapse. I have always had a deep-seated mistrust for corporations. I have plans to pull out most of my money, but don't know what to do with $350k sitting idly. I'd like to go into the stock market, maybe. Any ideas?

  13. @TRAN305

    ECONOMIC COLLAPSE HAS BEGUN, NOT SO BAD , NO MORE PAYING BILLS OR TAXES, ARMED MILITIAS WILL TAKE OVER AS OUR GOVERNMENT, BULLETS ARE WORTH MORE THAN PAPER MONEY , I HOPE THE ECONOMY COLLAPSES SOON NO MORE RICH OR POOR, THIS IS WHAT THEY FEAR NO MORE CONTROL OF THE MOB BY DISTRACTION OF WORKING AND PAYING BILLS, TRUE FREEDOM IS COMING BUT THE ECONOMY MUST COLLAPSE. PEOPLE WITH GUNS AND AMMO HAVE THE POWER NOT RICH PEOPLE WITH FAKE PAPER CURRENCY

  14. @robertgray6631

    The interest rate on the bond didn’t decrease. When you buy a treasury bond or cd the rate is locked in. If the bond they had was purchased at 2% and interest rates go up. That means when you buy a new bond it will have a higher interest rate. They could have borrowed against the bond and that would have prevented penalties for early withdrawal. It’s just clueless people in the 21st century. The investors will probably get their investment back after the bank is liquidated and there is no criminal activity and it’s a profit which it should be. They increased the interest rates after the republicans started complaining about inflation which was caused by trade war and letting a virus become a pandemic. The increased interest rates is to in courage savings in the banks. The banks are safer now than ever. They charge you for everything plus ever time you use your bank card. Money money money all day every day

  15. @megamikkila

    How stupid do you need to be to trust Government banks?
    Yes take my money so I can borrow back at 5%. Go F yaself. Banks are used to cash checks nothing more and borrow. Do Not give em your money at 0%.
    Ill pay you 3% or anyone would. DOPES

  16. @nikgarcia2823

    SVB went belly up because Democrats Inflationary Policies that the Young Jerks support that led to the Highest Inflation since 1946/47 causing Ridiculous Food Price Hikes & the Federal Reserve had no choice but to raise interest rates. Far Left Authoritarian Regressive Communist Democrats like The Young Jerks are the reason for ALL the suffering the less fortunate are going through because of Inflation. It's cruel & pathetic.

  17. @MrsRobot-yr8qk

    WHY DO WE STILL HAVE FOR PROFIT BANKS

  18. @MrsRobot-yr8qk

    Or, no-profit banks, that just, bank. Especially for startup companies that need their capital protected.

  19. @Genesis12nivana

    Organized sham, should have let it all collapse.

  20. @mattmmilli8287

    One thing no one realizes.. I know plenty of small startups with SVB. Most are not flush with cash and figuring out payroll week to week. MoRe tHaN 250k sounds like a lot but it’s not as you get towards 10-20 people who need paychecks -_-

  21. @spencerercanbrack5534

    So we got money for this AGAIN, but my student loans are a huge problem? get bent.

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