How SVB Financial Group imploded in two days By Reuters2 min read
© Reuters. FILE PHOTO: SVB (Silicon Valley Bank) logo is seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration
(Reuters) – The swift downfall of SVB Financial Group after rising interest rates brought on a tumultuous period for once high-flying technology startups has impaired virtually every asset class from money markets to forex.
The stunning collapse of the Santa Clara-based lender that focused primarily on tech startups was the biggest since Washington Mutual went bust in 2008.
Bank stocks – both major and smaller – saw hundreds of billions of dollars wiped away in the few days since SVB’s collapse as worries of a contagion sent shockwaves across global financial markets.
Below is a timeline of key events:
March 8, 2023 SVB said it intends to raise $2.25 billion in
common equity and preferred convertible stock
after it sold a portfolio of US Treasuries and
mortgage-backed securities at a $1.8 billion
March 9, 2023 SVB clients pulled their money from the bank
on the advice of venture capital firms such as
Peter Thiel’s Founders Fund, sources told
Reuters, that led to $42 billion of deposit
withdrawals on that day
March 10, 2023 A California regulator shut Silicon Valley
Bank and appointed the Federal Deposit
Insurance Corporation (FDIC) as receiver to
take control of its parent company, according
to the agency’s statement
March 11, 2023 Employees of Silicon Valley Bank were offered
45 days of employment at 1.5 times their
salary by the regulator FDIC, according to an
email to staff seen by Reuters
March 12, 2023 “Depositors will have access to all of their
money starting Monday, March 13,” the U.S.
Treasury, Federal Reserve and FDIC said in a
statement, adding that no losses associated
with the resolution of Silicon Valley Bank
will be borne by the taxpayer
March 13, 2023 The defunct holding company said it was
planning to explore strategic alternatives for
its businesses and appointed William Kosturos
as its chief restructuring officer.
President Joe Biden vowed to take action to
ensure the safety of the U.S. banking system.