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Browsing: The collapse of Silicon Valley Bank
- Silicon Valley Bank (SVB) was the 16th largest bank in the United States catering for the financial needs of technology companies around the world.
- The risk of a ripple effect impacting the global financial system is high.
- The US government has moved quickly to salvage the bank and safeguard deposits
US-based Silicon Valley Bank (SVB) was the 16th largest bank in the United States catering for the financial needs of technology companies around the world.
SVB’s woes started when the US reserve bank hiked rates to mitigare inflation pressures. The bank had a significant portfolio of government bonds whose prices fall when interest rates are jerked
The Guardian explains that, “If SVB were able to hold those bonds for a number of years until they mature, then it would receive its capital back. However, as economic conditions soured over the last year, with tech companies particularly affected, many of the …