The Collapse of Silicon Valley Bank

 

The collapse of Silicon Valley Bank represents a negative turn in the economy. One of the top US banks had its assets confiscated by regulators. These actions and bank failures seem very familiar to the 2008 global financial crisis. The collapse of  Silicon Valley Bank is one of the biggest bank failures in US history. The bank mostly provided services to workers in tech and and start-up companies. Some longtime tech companies also had investments in the bank. The assertion that this was just one case and should not be deemed disturbing is misguided. The banking sector is becoming unstable under the lack of regulation and mismanagement. The assets of Silicon Valley Bank are being transferred to  a newly created institution. The Deposit Insurance Bank of Santa Clara will pay for insured deposits. SVB had an estimated $209 billion in assets. The violation according to the FDIC was that accounts exceeded the $250,000 limit. The technology sector will be negatively impacted by the collapse of SVB. A combination of CEO avarice and layoffs have made the situation worse. Simultaneously, the Federal Reserve has failed to counter inflation. The Silicon Valley Bank has been active since 1983, but after 39 years it could not survive. The government has made a promise to ensure that depositors would get their money back. SVB demonstrates a combination of corruption and the hardship that start-up companies face. Large corporations can survive and new businesses are at a disadvantage.