econintersect.com
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
econintersect.com
No Result
View All Result
Home Business

What Led To Silicon Valley Bank Violent Implosion?

admin by admin
3월 15, 2023
in Business, Economics
0
What Led To Silicon Valley Bank Violent Implosion?
0
SHARES
0
VIEWS

SVB Financial Group Inc’s (SIVB.O) collapse and takeover by banking regulators on Friday can be traced to the U.S. Federal Reserve hiking interest rates and souring the risk appetite of investors.

Here is the series of events that caused the Silicon Valley Bank’s failure:

Federal Reserve Hikes Rates

The Federal Reserve has been hiking interest rates from their all-time low levels since 2022 in its bid to combat inflation. Investors have less appetite for risk when the money available to them becomes costly because of the higher rates. This weighed down on technology startups – the main clients of Silicon Valley Bank – because it made their investors more risk-averse.

Banking regulators close Silicon Valley Bank

Some Silicon Valley Bank Clients Faced Cash Crunch

As higher interest rates prompted the market for initial public offerings to collapse for many startups and made private fundraising more expensive, some Silicon Valley Bank clients began withdrawing money to meet their liquidity needs. This ended with Silicon Valley Bank searching for ways this week to meet its customers’ withdrawals.

SVB Sold Bond Portfolio At Significant Losses

To fund the redemptions, Silicon Valley Bank sold on Wednesday a $21 billion bond portfolio comprising largely of U.S. Treasuries. The portfolio was yielding an average 1.79%, well below the current 10-year Treasury yield of nearly 3.9%. This pushed SVB to recognize a $1.8 billion loss, which it required to fill through a capital raise.

SVB Announced Stock Sale

SVB disclosed on Thursday it would dispose of $2.25 billion in common equity and preferred convertible stock to fill its funding hole. Its shares closed trading on the day down 60 percent, as investors worried that the deposit withdrawals may push it to mobilize even more capital.

Buy Bitcoin Now

Stock Sale Collapsed

Some SVB clients withdrew their money from the bank on the advice of venture capital firms such as Peter Thiel’s Future Fund, Reuters reported. This rattled investors such as General Atlantic that SVB had lined up for the stock sale, and the capital raising effort collapsed late on Thursday.

SVB Sunk Into Receivership

Silicon Valley Bank hurried on Friday to obtain alternative funding, including through a sale of the company. Later in the day, however, the Federal Deposit Insurance Corporation (FDIC) then made it known that SVB was closed and placed under its receivership. The FDIC added that it would strive to sell SVB’s assets and that future dividend payments may be effected to uninsured depositors.

Tags: bankbank stocksbankingbond marketbondsimplosionSilicon Valley BankSVB
Previous Post

Bollinger Introduces £350 Champagne To Satisfy Growing Demand

Next Post

SVB Is The Biggest Bank Failure Since 2008 Financial Crisis

Related Posts

Bitcoin Is Finally Trading Perfectly Like 'Digital Gold'
Economics

Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’

by admin
6,746 ETH Valued At $12M Was Just Burned
Economics

6,746 ETH Valued At $12M Was Just Burned

by admin
Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures
Economics

Bitcoin: What Next After Consolidation Ends?

by admin
US Government Offloads Another 8,200 Bitcoin – On-chain Data
Economics

US Government Offloads Another 8,200 Bitcoin – On-chain Data

by admin
Bitcoin Stumbles As Macro And Regulatory Concerns Arise, What Next?
Economics

Bitcoin Stumbles As Macro And Regulatory Concerns Arise, What Next?

by admin
Next Post
SVB Is The Biggest Bank Failure Since 2008 Financial Crisis

SVB Is The Biggest Bank Failure Since 2008 Financial Crisis

답글 남기기 응답 취소

이메일 주소는 공개되지 않습니다. 필수 필드는 *로 표시됩니다

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

© Copyright 2024 EconIntersect

No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자

© Copyright 2024 EconIntersect