Thread by @cpiup

16th Largest Bank - Silicon Valley Bank (SVB) rapidly collapsed! Lessons to be learnt!!

#Investing in share & bond market by Banks #CollapseOfSiliconValleyBank

Little known to the general public, SVB specialized in financing start-ups and

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had become the 16th largest US bank by assets: at the end of 2022, it had $209 billion in assets and approximately $175.4 billion in deposits.

On Friday, March 10, the bank was shut down by US regulators and its assets were seized.

#CollapseOfSiliconValleyBank

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Its demise represents not only the largest bank failure since Washington Mutual in 2008, but also the second largest failure ever for a retail bank in the United States.
The surprisingly rapid collapse of SVB has left markets rattled.
#CollapseOfSiliconValleyBank

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SVB's problems were sparked by customer withdrawals that led the Bank to liquidate securities positions whose values had plummeted due to the Federal Reserve's interest rate hikes as consequence of galloping increase in the inflation.

#CollapseOfSiliconValleyBank

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The quick jump in interest rates meant that securities they had bought were selling for significantly less.

#CollapseOfSiliconValleyBank

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@threadreaderapp please roll out.