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A repeat of the Lehman moment? Silicon Valley bank failure sparks biggest crisis in U.S. banking sector

The huge loss of Silicon Valley Bank (SVB) caused the stock price to plummet. The Federal Deposit Insurance Corporation (FDIC) issued a statement. The California Department of Financial Protection and Innovation (DFPI) has closed down Silicon Valley Bank and appointed FDIC as bankruptcy administrator People, even transferred their deposits to another deposit insurance bank, causing the biggest banking crisis since the financial tsunami.

Silicon Valley Bank, headquartered in Santa Clara, California, is the 16th largest bank in the United States, mainly serving technology, venture capital and start-up companies. The parent company Silicon Valley Bank Financial Group (SVB Financial Group) plans to increase capital through cash After raising US$2.25 billion (approximately NT$69.2 billion), the market panicked, and the stock price collapsed by more than 60%.

The incident originated from the fact that after the U.S. Federal Reserve used the rate hike cycle to suppress inflation, Xinchuang withdrew money from the bank faster than Silicon Valley Bank expected, and new investment stagnated, resulting in no new capital inflows from Silicon Valley Bank, while Silicon Valley The value of bonds held by banks has shrunk due to rising interest rates, leading to the closure of Silicon Valley banks, triggering the biggest banking crisis since the 2008 financial tsunami.

The U.S. Federal Deposit Insurance Corporation (FDIC) announced that the California Department of Financial Protection and Innovation (DFPI) has closed Silicon Valley Bank, and the FDIC has taken over the bank’s assets. Santa Clara National Bank” (DINB).

The Federal Deposit Insurance Corporation of the United States stated that Silicon Valley Bank is the first insured financial institution to close this year, and insured depositors can use the funds in the bank as early as Monday morning, and the total deposits exceed the FDIC-guaranteed limit of 250,000 US dollars. Customers will receive proof of receivership and will be prioritized for future repayments.

Silicon Valley Bank of the United States is a small and medium-sized bank that has no retail business and focuses on PE/VC and technology-based enterprise financing. It is not clear how many individual depositors there are, and how many individual depositors have a deposit amount of more than 250,000 US dollars, but Some publicly listed corporate depositors had to disclose their deposits with Silicon Valley Bank due to the sharp drop in stock prices.

At present, some companies claim that the impact is limited, but there are still tens of millions of dollars in corporate deposits, and even as much as 26% of cash and equivalents in it. US Treasury Secretary Yellen immediately called the Federal Reserve, the Federal Reserve Leaders of insurers held a meeting to stress that the U.S. banking system remains resilient and that regulators have the capacity to deal with the Silicon Valley banking crisis.

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