Silicon Valley Bank collapsed on March 10, 2023, after a bank run. It is the first bank in the United States to collapse since the 2008 financial crisis. It has been shut down by the California Department of Financial Protection and Innovation. If you are an account holder of this bank and are looking for information regarding what will happen to all your assets deposited in this bank, then stay tuned to know all about it.
Silicon Valley Bank Collapse
Hearing the news of the collapse of Silicon Valley Bank, the account holders of other banks are also worried whether their assets deposited in other banks are safe or not. If you are looking for answers to all the questions coming in your mind then you need to know the reason behind this bank collapse,
The reason behind SILICON VALLEY BANK COLLAPSE is bank run. It happens when the account holders of a bank lose faith in the bank and they feel that their deposited amount or assets are no longer safe and start withdrawing it. Due to the sudden collapse of this bank, billions of dollars of companies, investors and depositors have been stranded, financial banking and financial stocks have also declined due to the collapse of this bank.
48 hours before the bank collapse, the SUV announced that it is to raise $2 million fund to fill the gaps in its balance sheet, after hearing this news, there was a lot of concern among the customers and depositors of this bank, and then after which account holder started withdrawing their deposited assets and amount and a bank run happen, due to which this bank collapsed.
How did Silicon Valley Bank collapse?
According to analysts, the biggest reason behind the collapse of this bank is the high interest rate, and there is also fear that if it increases further then it may affect other banks as well, now it has to be seen what happens in future.
When the stock of the SUV fell by 60% overnight, account holders began to feel that their deposits in Silicon Valley Bank were not safe, so they started withdrawing their deposits which resulted in the collapse of this bank, shortly after that the California Department of Financial Protection and Innovation shut down the SUV on the orders of the Federal Deposit Insurance Corporation.
You should know that Silicon Valley Bank had earned a lot of money by investing in tech startups, after which they invested most of their assets in US bonds, to reduce inflation, the Federal Government had increased the interest rate, due to which their bond value has come down and according to analysts this is the biggest reason behind the downfall of this bank.
What will happen next after the bank collapses?
Silicon Valley Bank was one of the largest commercial banks in the United States that collapsed on March 10, 2023 after a bank run, millions of account holders have their money deposited in this bank, if you also have an account in this bank and you are worried about your deposits, then let us tell you that about 175 billion dollars of customers are currently under the control of the Federal Deposit Insurance Corporation.
FDIC has opened a new bank named National Bank of Santa Clara which will hold 175 billion dollar deposits of millions account holders of Silicon Valley Bank. The Federal Deposit Insurance Corporation has also said that all banking facilities will be normal from Monday morning, so people will have access to their deposits. and it has also been told from the officials that the checks issued by Silicon Valley Bank will remain valid.
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