A California regulatory body has declared bankruptcy for Silicon Valley Bank, the 16th largest bank in the United States. The credit institution is oriented towards start-ups. At the end of 2022, 89% of deposits – about $175 billion – were not insured.
SVB’s bankruptcy is the largest since the 2008 crisis, making it the second-largest bank failure in US history after Washington Mutual Bank, the Associated Press reported. “This is an extinction event for startups,” said Harry Tan, CEO of startup incubator Y Combinator. His company has helped create Airbnb, DoorDash and Dropbox and has sent hundreds of entrepreneurs to SVB.
I listened to different interpretations. The facts are more or less like that, but the interpretations are wrong. We took over the bank in dire straits. This w…
According to American media, the fate of the uninsured deposits has not yet been decided. Companies such as video game maker Roblox Corp and network media player maker Roku Inc have already announced deposits of hundreds of millions of dollars in SVB. Shares of the latter fell 10% after it became clear that a large part of the investments were not insured.
SVB was taken over by the Federal Deposit Insurance Commission. The capital balance will be used to pay compensation to depositors and to repay debts owed to creditors. According to the White House, Treasury Secretary Janet Yellen is “monitoring the situation closely.” The chairwoman of the White House Council of Economic Advisers, Cecilia Rose, said the US banking system “is fundamentally different now than it was 10 years ago.”
More: They condemned us for KTB, but we set out to change the law because of another bank
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