Silicon Valley Bank, which was started in the year 1983 in the United States, has gradually grown to become one of the largest American banks and the 16th largest bank in the country. Even in the last year 2021, it was in good condition with assets up to Rs.17 lakh crore.
But since then, inflation has increased, and Silicon Bank has been stuck in Varagadan to a large extent. Its shares tumbled around 69% after it announced last week that it had sold its entire debt portfolio at a loss of Rs 14,000 crore to offset the losses.
As the news spread, people flocked to withdraw their deposits from Silicon Bank. In 48 hours, around Rs 3.25 lakh crore of deposits in Indian currency were withdrawn from the bank by the companies and the public, and now the bank has been declared insolvent. Due to this, there is a fear that the recession of 2008 will happen again.
Now that Silicon Valley Bank is bankrupt, efforts are underway to sell it to other companies. As part of that, HSBC Bank has acquired the UK arm of Silicon Valley Bank for just £1 (Rs 100 in Indian currency).
In this case, First Citizens bought Silicon Bank’s deposits and loans division for $1.65 billion less than its actual value. Also, due to the collapse of these banks, international investors are shifting their investments away from the stock market and crude oil into gold.
Due to this, while the price of gold has suddenly increased, the price of crude oil has fallen sharply internationally. Crude oil prices have dropped by $10 per barrel in the last 3 weeks to $75, but it is worth noting that petrol and diesel prices have not been reduced in India.
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