![]() ![]() Typically that's not an issue, because banks hold onto those for a long time - unless they have to sell them in an emergency.īut Silicon Valley's customers were largely startups and other tech-centric companies that started becoming more needy for cash over the past year. These investments are typically safe, but the value of those investments fell because they paid lower interest rates than what a comparable bond would pay if issued in today's higher interest rate environment. The bank bought billions of dollars worth of bonds over the past couple of years, using customers' deposits as a typical bank would normally operate. Some startups that had ties to the bank scrambled to pay their workers, and feared they might have to pause projects or lay off or furlough employees until they could access their funds. Its downfall is the largest failure of a financial institution since Washington Mutual collapsed at the height of the financial crisis more than a decade ago. ![]() NEW YORK (AP) - The financial institution best known for its relationships with high-flying world technology startups and venture capital, Silicon Valley Bank, experienced one of the oldest problems in banking - a bank run - which led to its failure on Friday. The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday. The Federal Deposit Insurance Corporation is seizing the assets of Silicon Valley Bank, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis. Comments A Silicon Valley Bank sign is shown at the company's headquarters in Santa Clara, Calif., Friday, March 10, 2023. ![]()
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