Silicon Valley Bank Collapse Wiki

Silicon Valley Bank Collapse Wiki: March 10, 2023, will be a memorable day in the United States because the second-largest bank failed on that day. Yes, everything was fine after the financial crisis of 2008 until this incident rocked the entire country.

One of the most popular banks in the United States, Silicon Valley, collapsed on March 10. It was a big shock for people, especially startups and tech companies. Let’s check the Silicon Valley Bank Collapse Wiki to learn more.

Why did Silicon Valley Bank (SVB) collapse?

The IT sector has grown exponentially due to the pandemic. Many startups emerged in the technology sector, which increased the capital of banks. SVB is one of the famous banks and is preferred by most technology companies; For this reason, SVB has invested in government bonds. It was bought for the long term, but luck was not on their side, so the market value of this bond fell in 2022-2023.

One of the reasons for the decline in value was the Federal Reserve’s high interest rates and the SVB began to collapse. Many consumers started withdrawing money to meet their needs as there was already inflation in the country. SVB found it very difficult to return money to its customers, so it sold $21 billion worth of securities and also borrowed $15 billion to meet the needs of its customers. The investigation revealed that SVB also opted for a distress sale of its own stock worth $2.25 billion.

Finally, on March 10, the bank was seized and transferred to the Federal Deposit Insurance Corporation. The maximum amount insured by FIDC was also over US$172 billion. But after 2 days FIDC announced that depositors will get their money soon. The collapse of SVB affected start-ups as people were unable to raise funds for a period of time and thus faced tough times.

What steps did FIDC take after the collapse of SVB?

Looking at the SVB situation, IFDC, along with other agencies and the Treasury, have assured the public that their money is safe and will arrive soon. He then started auctioning off all the parts of the bank and reopened it as Bridge Bank. Now it is not SVB but Silicon Valley Bridge Bank where the next plan to work for savers.

Yes, there is a plan to declare bankruptcy dividends with depositor insurance to guarantee FIDC. This was an important step because many new initiatives were at stake and there was no explanation. The intervention of FIDC and other financial authorities responded positively and gave people the confidence to get things back on track.

What is the effect of the fall of the country?

The collapse of the SVB has not only affected the US, but many other countries have been less affected. The collapse of ET has hit the entire economy including customers, shareholders and many other financial institutions. The government is also taking action and has intervened to find a solution. Let’s hope the depositors don’t face a crisis and get their money back at the earliest. However, there is some debate as to why it collapsed and the impact on the country’s economy.

Conclusion

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Written by Prince Rai

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