Regulators close Silicon Valley Bank to avert crisis
STORY: Silicon Valley Bank - lender to some of the biggest names in the tech industry - collapsed on Friday...
...the largest bank failure since the 2008 financial crisis...
...forcing regulators to move quickly to avert a meltdown... as the bank's collapse reverberated across global markets.
"...at least so far, this is not 2008."
Alexander Yokum, an Equity Research Analyst at CFRA Research, explains.
“Silicon Valley Bank is a little bit different than most banks, right? So they cater to venture capitalists and private equity firms // because last year and this year, funding has really fallen off a cliff // now some customers want some money and they don't have the deposits to give them back…”
California banking regulators shut down the bank and put it under the control of the Federal Deposit Insurance Corporation.
The FDIC said the main office and all branches of Silicon Valley Bank will reopen on March 13, and that all insured depositors will have full access to their insured deposits no later than Monday morning.
Dean Nelson, CEO of start-up Cato Digital, said he had accounts with SVB.
"Yeah. This morning I came out to talk to the bank, just got in line with a lot of other founders and CEOs just to find out what was happening and then also the options we've got. And really, as a CEO, we have to make sure that both our employees, our customers and our investors, you know, we're protecting the things that we have. So that's what we're looking to explore. But they just came out and told us that the bank is shut down. I think they're just trying to figure out everything that they can by Monday. A little nerve wracking when it comes down to how you keep operating your company."
In a memo to employees Friday morning seen by Reuters, SVB said it was undergoing a series of conversations to determine next steps.
Shares of the company were halted on Friday after tumbling as much as 66% in premarket trading.
SVB was not immediately available for comment.