SVB Stock Halted
Silicon Valley Bank was home to many start-ups and companies which ran on VC-raises.
It catered to the Silicon Valley style start-ups as you can see in the name.
What Happened?
- Customer deposits started going down
- The bank had to sell ~$1.7 billion in shares / US Treasuries at a loss because of this.
- Dominos started falling as liquidity crunch emerged.
- Customers began pulling out at faster rate.
- A bank run ensued. (hey that's us! BankRunners!)
- FDIC steps in March 10th 2023, to handle repaying customers.
Are Deposits Safe?
This was an FDIC insured bank thankfully, so accounts with less than $250,000 will be made whole, as promised by the Federal Reserve's insurance.
However..
..bad news to those accounts of businesses or individuals with more than $250k in the bank. FDIC insurance only covers amount up to $250k, but they have made a statement saying after the bank's assets are liquidated, those depositors might see a small portion of their funds, but it is doubtful.
What's the damage?
Luckily, this was an FDIC insured bank.
We are not certain on the exact numbers but it is said that the bank had ~$250 billion of assets reported in the 4th quarter of last year, which is obviously not gone, but a lot of moving around and making customers whole will be taking place.
We will know more as information comes out.
This, is why at BankRunners, we support a transparent and open financial system, one that can only be accomplished through the use of public financial rails via decentralized blockchains.
