Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Silicon Valley Bank: Biggest failure since 2008 financial crisis as US regulators close bank and seize assets

Silicon Valley Bank: Biggest failure since 2008 financial crisis as US regulators close bank and seize assets

Regulators swooped in the middle of the day to seize the bank's assets, in a sign of how quickly the bank fell into trouble. Investors in London are said to be "spooked".
US regulators have shut down the country's 16th largest bank, in the biggest collapse of a financial institution since the 2008 financial crisis.

Silicon Valley Bank failed after depositors - mostly technology workers and venture capital-backed companies - began withdrawing their money, creating a run on the bank.

The US Federal Deposit Insurance Corporation (FDIC) has seized its assets.

It said the bank had $209 billion (£173 billion) in assets and $175.4 billion (£146 billion) in deposits at the time of failure.

It was unclear how many of the deposits were above the $250,000 (£207,000) insurance limit.

The bank's downfall marks the largest failure of a US bank since Washington Mutual during the 2008 financial crisis.

The FDIC could not immediately find a buyer for the bank's assets, signalling how fast depositors had cashed out.

It also seized the bank's assets in the middle of the business day, a sign of how dire the situation had become.

The financial health of Silicon Valley Bank had been increasingly in question this week after the bank announced plans to raise up to $1.75bn dollars (£1.45 bn) in order to strengthen its capital position.

Silicon Valley Bank had acted as a major financial conduit for venture capital-backed companies, which have been hit hard in the past 18 months as the US Federal Reserve has raised interest rates and made riskier tech assets less attractive to investors.

The bank was heavily exposed to the tech industry but experts say there is little chance of knock-on effects in the banking sector as there was in the months leading up to the recession more than a decade ago.

Major banks have sufficient capital to avoid a similar situation.

In 2007, the biggest financial crisis since the Great Depression rippled across the world after mortgage-backed securities tied to ill-advised housing loans rippled from the US to Asia and Europe.

The panic on Wall Street led to the collapse of the storied Lehman Brothers, founded in 1847.

'Mild panic' as bank failure leaves investors 'spooked'

The City of London also felt the effects of the bank's collapse on Friday.

There were big market falls for the two biggest international banks on the FTSE 100, HSBC and Standard Chartered, which dropped more than 4.5%.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said there was a "state of mild panic" surrounding shares in the financial sector because of the Silicon Valley Bank news.

She said interest rate worries had also rattled investors but that the news from the US had them particularly "spooked".

The FTSE 100 closed down 1.7% at 7,748.35 points, a reduction of 131.63.

Markets were also down in the US where the S&P 500 had given back 0.7% of its value while the Dow Jones was trading down 0.4% shortly after trading ended in London.

France's Cac 40 and Germany's Dax indices both closed down 1.3%.

On currency markets the pound gained 1.1% against the dollar, trading at 1.205 by the close of play on stock markets.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
×