{"id":562126,"date":"2023-03-11T00:38:21","date_gmt":"2023-03-10T21:38:21","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/five-things-to-know-about-the-silicon-valley-bank-collapse\/"},"modified":"2023-03-11T00:38:21","modified_gmt":"2023-03-10T21:38:21","slug":"five-things-to-know-about-the-silicon-valley-bank-collapse","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/","title":{"rendered":"#Five things to know about the Silicon Valley Bank collapse"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a29500d48a80\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a29500d48a80\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/#Five_things_to_know_about_the_Silicon_Valley_Bank_collapse\" >Five things to know about the Silicon Valley Bank collapse<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/#Silicon_Valley_Bank_was_a_major_force_in_tech\" >Silicon Valley Bank was a major force in tech<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/#The_bank_is_the_latest_tech_victim_of_high_interest_rates\" >The bank is the latest tech victim of high interest rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/#The_collapse_was_remarkably_abrupt\" >The collapse was remarkably abrupt\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/#Only_a_fraction_of_customer_funds_may_be_covered_by_regulators\" >Only a fraction of customer funds may be covered by regulators<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-the-silicon-valley-bank-collapse\/#The_collapse_is_spurring_broader_concerns_for_banks\" >The collapse is spurring broader concerns for banks<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Five_things_to_know_about_the_Silicon_Valley_Bank_collapse\"><\/span>Five things to know about the Silicon Valley Bank collapse<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<p>Regulators shut down Silicon Valley Bank on Friday, marking the biggest bank failure since the 2008 recession and sending shockwaves across the tech world.\u00a0<\/p>\n<p>The Federal Insurance Corporation (FDIC) created a National Bank of Santa Clara to hold deposits and other assets of the failed Silicon Valley Bank, but the abrupt closing is impacting tech firms which are facing im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te effects like ensuring employees get paid.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p>More than 93 percent of the $161 billion deposited at Silicon Valley Bank is not insured by the FDIC, according to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/business\/status\/1634211584657571843\">a Bloomberg News analysis<\/a>.<\/p>\n<p><strong>Here\u2019s how Fed rate hikes are hurting tech firms<\/strong><\/p>\n<p>The closure will have further reaching impacts for the tech world, and is spurring additional concerns for banks. <\/p>\n<p>Here\u2019s five things to know about the Silicon Valley Bank collapse.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Silicon_Valley_Bank_was_a_major_force_in_tech\"><\/span><strong>Silicon Valley Bank was a major force in tech<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Silicon Valley Bank, established four decades ago, catered to the start-up and venture capital-funded tech world. Its clients included brands such as Shopify, ZipRecruiter and venture capital firm Andreessen Horowitz, according to the bank\u2019s website.\u00a0<\/p>\n<p>Wedbush analyst Dan Ives called it a \u201cnightmare situation.\u201d\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>\u201cThis will have a massive ripple impact across the tech ecosystem and Silicon Valley private company artery. SVB is a foundational piece of the tech startup community and will have a constrained impact on funding for tech startups going forward,\u201d Ives said in an email.\u00a0<\/p>\n<p>Even businesses that aren\u2019t clients are getting impacted by the closure, especially with the most immediate impact on delaying payrolls.\u00a0<\/p>\n<p>Parker Conrad, CEO of Rippling, a payroll processor that used Silicon Valley Bank, said there would be payment delays of pay runs initiated earlier this week. <\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<p>The company is focused on \u201cgetting these employees paid as quickly as possible,\u201d he <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/parkerconrad\/status\/1634237386564730882\">said in a Twitter thread<\/a>. Going forward, Rippling will use JPMorgan Chase &amp; Co.\u00a0<\/p>\n<p>Kevin Yun, co-founder of GrowSurf, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.semafor.com\/article\/03\/10\/2023\/silicon-valley-bank-collapse-sows-wider-fears\">told Semafor<\/a> that he thought he had \u201cnothing to do with SVB,\u201d since his customer-referral software company used another bank, Mercury. <\/p>\n<p>But by using Rippling, his company is getting roped into the larger impact of the shutdown, too.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"645\" height=\"363\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?w=645\" alt=\"\" class=\"wp-image-1597279\" srcset=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=645,363 645w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=160,90 160w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=300,169 300w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=320,180 320w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=256,144 256w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=512,288 512w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=640,360 640w, https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2014\/07\/startup_getty.jpg?resize=50,28 50w\" sizes=\"auto, (max-width: 899px) 100vw, 645px\"><figcaption class=\"wp-element-caption\">Silicon Valley Bank was uniquely dependent on the growth of startups and other tech companies.<\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"The_bank_is_the_latest_tech_victim_of_high_interest_rates\"><\/span><strong>The bank is the latest tech victim of high interest rates<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Silicon Valley Bank was hit hard by the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of the Federal Reserve\u2019s rising interest rates. It\u2019s the latest way rising interest rates have hit the tech sector.\u00a0<\/p>\n<p>Tech companies and the ecosystem they are created in are highly sensitive to increases in interest rates because many companies, particularly startups, operate on high levels of debt. <\/p>\n<p>Venture capital and other riskier forms investment also become less profitable as businesses face higher borrowing costs, and the steep decline in crypto values also s<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed billions from many tech businesses.<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\"><\/aside>\n<p><strong>Big Tech bleeds tens of thousands of jobs after pandemic heyday<\/strong><\/p>\n<p>Tech firms that had been spending high responded to the rising Fed interest rates with layoffs, including at some of the nation\u2019s largest companies like Facebook parent company Meta, Google parent company Alphabet, and Amazon.\u00a0<\/p>\n<p>Those three companies alone have recently rolled out plans to lay off a combined 41,000 employees.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\"><\/aside>\n<p>But now even nascent startups, already facing headwinds from the rising rates, now have another hurdle in their way.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_collapse_was_remarkably_abrupt\"><\/span><strong>The collapse was remarkably abrupt\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It\u2019s rare for the FDIC to take over banks as large as Silicon Valley Bank. It\u2019s even rarer for the agency to take it over in the middle of the work day.<\/p>\n<p>Traditionally, the FDIC will announce its decision to take over and liquidate a bank after the stock market has closed Friday to limit the potential damage to customers. <\/p>\n<aside class=\"ad-unit ad-unit--mr7_ab\"><\/aside>\n<p>But the speed of Silicon Valley\u2019s collapse prompted bank regulators to jump into action, which stunned banking experts and sector analysts.<\/p>\n<p>The bank\u2019s death spiral began Thursday, shortly after Silicon Valley executives announced plans to raise up to $1.75 billion in capital to shore up its books. <\/p>\n<p>As customers sought to pull out their funds hand over fist, the California Department of Financial Protection and Innovation stepped in to end the bank run on Friday. <\/p>\n<p>The state agency seized the bank and handed it over to the FDIC, which will take the bank apart in an attempt to make its customers and debtors whole.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Only_a_fraction_of_customer_funds_may_be_covered_by_regulators\"><\/span><strong>Only a fraction of customer funds may be covered by regulators<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Silicon Valley Bank was overseen by the FDIC, a federal agency responsible for making sure banks are sturdy and responsible enough to serve their customers. <\/p>\n<p>When an FDIC-regulated bank fails, its customers are insured to up to $250,000 per account with the bank.\u00a0<\/p>\n<p>While some customers may get all of their money refunded by the FDIC, scores of businesses and individuals with millions of dollars in the bank may see little of it returned. <\/p>\n<p>The FDIC said Friday that customers will have access to their insured deposits no later than Monday morning. Uninsured depositors will receive a dividend and a certificate indicating how much money they are owed from the bank as the FDIC sells off its assets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_collapse_is_spurring_broader_concerns_for_banks\"><\/span><strong>The collapse is spurring broader concerns for banks<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Silicon Valley Bank was the largest bank collapse since the Great Financial Crisis in 2008 and its meltdown spurred concerns of a broader decline across the sector.<\/p>\n<p>The Dow Jones Industrial Average, S&amp;P 500 index and Nasdaq composite all closed with losses of more than 1 percent Friday as shares of banks big and small took a nosedive. <\/p>\n<p>Market operators froze shares of several bank stocks, including First Republic, PacWest and crypto-focused Signature bank due to high volatility,<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2023\/03\/09\/stock-market-today-live-updates.html\"> according to CNBC<\/a>, and even Goldman Sachs and Bank of America shares took a hit.<\/p>\n<p>Treasury Secretary Janet Yellen convened a meeting of federal banking regulators Friday, the Treasury Department announced, to discuss the ongoing damage caused by the collapse of Silicon Valley Bank. <\/p>\n<p>Even so, she \u201cexpressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient.\u201d<\/p>\n<p>Celia Rouse, chair of the White House Council of Economic Advisers (CEA), also told reporters Friday she believed the banking forms imposed after the 2007-08 crisis will shield the economy from deeper harm.<\/p>\n<p>\u201cOur banking system is far more resilient than it was in 2008, we learned a lot, we\u2019ve got better tools specifically so we can protect the important investments of Americans,\u201d Rouse said.<\/p>\n<p>While Silicon Valley Bank\u2019s collapse could be devastating for scores of tech companies and thousands of industry workers, more banking experts are confident it won\u2019t trigger a broader crisis in the industry. <\/p>\n<p>The bank was uniquely dependent on the growth of major tech firms and the financial health of the industry at large, which made it highly susceptible to damage from rate hikes.<\/p>\n<p>\u201c[Silicon Valley Bank\u2019s] balance sheet looks nothing like most US banks\u2019,\u201d wrote Karen Shaw Petrou, managing partner at Federal Financial Analytics, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/KarenPetrou\/status\/1634198282019692544\">in a Friday tweet<\/a>.<\/p>\n<p>\u201cThis isn\u2019t systemic, but it shouldn\u2019t have happened,\u201d Petrou continued.<\/p>\n<p><em>Alex Gangitano contributed.<\/em><\/p>\n<\/div>\n<p>Copyright 2023 Nexstar Media Inc. 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