The country’s 16th largest bank fell amid a tech growth crisis. Concern has taken hold of many employees who are waiting to see what will happen to their capital.
The crisis in the tech sector has brought down the historic startup bank. A wave of cash withdrawals from Silicon Valley Bank sank the establishment, which could no longer find liquidity in a panic. The a SVB thus lost 60% on the New York Stock Exchange on Thursday March 9, 2023 and its title was suspended on Friday before the start of the session. Shortly after announcing the sale of $21 billion in securities – with a loss of $1.8 billion in the process – SVB saw the California state banking regulator decide to close it, and thereby depriving it of all freedom and leeway.
Little known to the general public, SVB had specialized in the financing of startups and had become the 16th American bank by the size of assets: at the end of 2022, it had 209 billion dollars in assets and around 175.4 billion in deposits. The case therefore threatens many companies in the short term, particularly in the regions of San Francisco and Boston, where the bank was established.
Tech workers worried
The SVB, which has come under the control of the regulatory authority, will reopen on Monday; deposits are guaranteed by federal law up to $250,000. Beyond that, everything depends on the sums that will be recovered during the liquidation or sale of the institution. Companies are worried like Roku, a streaming start-up, which announced that it had deposited $487 million, or a quarter of its cash, in SVB. Other companies have told US media that they have no way to pay employees at this time.
US Treasury Secretary Janet Yellen called several financial sector regulators to discuss the situation. She said she had “full confidence” in their ability to take the appropriate and estimated measures that the banking sector remained ” resilient “hoping that she will not face a wind of panic
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