What seemed like a safe bet quickly came unstuck, as the Federal Reserve hiked interest rates aggressively to tame inflation. Like many other banks, SVB ploughed billions into US government bonds during the era of near-zero interest rates. SVB’s collapse came suddenly, following a frenetic 48 hours during which customers yanked deposits from the lender in a classic run on the bank.īut the root of its demise goes back several years. Deposits ballooned from $62 billion to $198 billion over that period, as thousands of tech startups parked their cash at the lender. The bank’s assets, which include loans, more than tripled from $71 billion at the end of 2019 to a peak of $220 billion at the end of March 2022, according to financial statements. SVB benefited hugely from the tech sector’s explosive growth in recent years, fueled by ultra-low borrowing costs and a pandemic-induced boom in demand for digital services. It also has operations in Canada, China, Denmark, Germany, Ireland, Israel, Sweden and the United Kingdom. It provided banking services to nearly half of all US venture-backed technology and life science companies. Justin Sullivan/Getty ImagesĮstablished in 1983, Silicon Valley Bank was, just before collapsing, America’s 16th largest commercial bank. A Brinks armored truck sits parked in front of the shuttered Silicon Valley Bank headquarters on Main Santa Clara, California, United States.
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