Get the latest on the shocking news of regulators seizing Silicon Valley Bank, the largest bank takeover since the Great Recession.
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| The shocking news of regulators seizing Silicon Valley Bank |
This led to concerns over the bank's balance sheet and marked the biggest financial institution failure since the financial crisis over a decade ago.
The likelihood of other banks being affected by the negligence of Silicon Valley Bank is low, unlike during the Great Recession because the bigger banks have good financial positions and enough money to cover potential losses.
This collapse happened swiftly and had a significant impact on the banking sector, causing shares of almost all financial institutions to fall lower.
Even though Silicon Valley Bank was heavily exposed to the tech industry, some industry analysts suggest that it was still a good company and a wise investment.
The Federal Deposit Insurance Corporation moved to shutter the bank shortly before noon on Friday.
The FDIC could not immediately find a buyer for the bank's assets, signaling how quickly depositors had cashed out.
Although Silicon Valley Bank appeared stable this year, it announced plans to raise up to $1.75 billion on Thursday to strengthen its capital position, which led to investor panic and a 60% drop in shares.
Silicon Valley Bank was a significant financial conduit between the technology sector and its workers, founders, and startups.
It was seen as good business sense to develop a relationship with the bank if a founder wanted to find new investors or go public.
However, its connections to the tech sector became a liability rapidly, especially since technology stocks have been hit hard in the past 18 months.
While some industry analysts suggest that Silicon Valley Bank was a good company, this collapse highlights the importance of diversifying investments and monitoring the financial health of companies regularly.
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