New York: A Silicon Valley bank that finances business startups has collapsed. Investors were informed that the bank had collapsed on Friday. Sikon Valley Bank was shut down by California banking regulators. Then control of investments was also taken over.
This is the biggest collapse in the banking sector since the 2008 global financial crisis. Bank shares fell sharply in global trade. The bank collapsed after 48 hours with Sikon Valley Bank shares plummeting. Silicon Valley used to invest in US bonds. Bonds have fallen in value since the Federal Reserve raised interest rates last year to control inflation. With the spread of Covid, the funding in startups has also decreased. Due to this, many people withdrew their investment.
The bank has a loss of 2 billion dollars. With the bank’s closure, $175 billion in deposits fell under the control of the Federal Deposit Insurance Corporation (FDIC). The FDIC started a new bank called National Bank of Santa Clara and transferred the assets of Silicon Valley Bank to it. The FDIC announced that all bank branches will be open on Monday and that depositors will be able to make all purchases and sales of funds.
English Summary: Silicon Valley Bank collapse