Silicon Valley Bank

About Silicon Valley Bank

Silicon Valley Bank failed on March 10, 2023, the second largest bank failure in US history with 209 billion in assets. SVB was the primary bank for technology startups and venture capital firms. The bank had invested heavily in long term Treasury bonds when interest rates were near zero. When the Federal Reserve raised rates rapidly in 2022 and 2023, the bond portfolio lost value. A bank run on March 9, 2023 drained 42 billion in deposits in a single day, accelerated by panic on Twitter and group chats among VCs. The FDIC guaranteed all deposits, including those above the 250,000 insurance limit, using a systemic risk exception. SVB was sold to First Citizens Bank. The failure raised questions about interest rate risk management and uninsured deposits.