Silicon Valley Bank Closed by Regulators After Bank Run
Summary from the AllSides News Team
Regulators shut down tech lender Silicon Valley Bank (SVB) on Friday after a bank run.
Government Response: The FDIC said it was taking control of SVB’s deposits and that insured depositors would have access to their deposits no later than Monday morning. Some called for a government bailout of SVB, drawing comparisons to the 2008 financial crisis.
Timeline: On Wednesday, SVB said it sought over $2 million in capital after selling assets at a $1.8 billion loss to make up for an unexpected decline in deposits. Unable to raise funds, SVB sought a buyer but was unsuccessful. SVB’s stock price dropped 60% on Thursday, triggering a selloff that led the nation’s four largest banks — JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America — to lose $52 billion in market value. On Friday, trades of the SVB’s stock were halted after the share price plummeted another 68% in pre-market trading.
How the Media Covered It: Coverage was widespread and prominently featured across the spectrum, but Center and Lean Left outlets were generally quicker to publish coverage on Friday. Some headlines portrayed the situation as especially dire; New York Post’s (Lean Right bias) headline featured the quote, “We found our Enron,” and CNBC (Center bias) called it the “biggest bank failure” since the 2008 crisis.
Featured Coverage of this Story
From the Left
Silicon Valley Bank collapses after failing to raise capital
Silicon Valley Bank collapsed Friday morning after a stunning 48 hours in which its capital crisis set off fears of a meltdown across the banking industry.
California regulators closed down the tech lender and put SVB in control of the US Federal Deposit Insurance Corporation. The FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets to pay back its customers, including depositors and creditors. The FDIC is an independent government agency that insures bank deposits and oversees the financial institutions.
The FDIC said all...
From the Center
Silicon Valley Bank Closed by Regulators
Regulators shut down Silicon Valley Bank Friday after a run on deposits doomed the tech-focused lender’s plans to raise fresh capital.
The Federal Deposit Insurance Corp. said it has taken control of SVB via a new bank it created called the Deposit Insurance National Bank of Santa Clara. All of the bank’s deposits have been transferred to the new bank, the regulator said.
From the Right
Silicon Valley Bank meltdown sparks contagion fears: ‘We found our Enron’
Fears of a broad financial contagion spread on Friday after tech lender Silicon Valley Bank set off alarm bells over liquidity concerns — sparking share losses across the banking sector worth some $52 billion on Thursday.
Peter Thiel’s venture capital firm Founders Firm advised clients to withdraw their deposits from Silicon Valley Bank — despite the fact the lender has been a mainstay for tech startups for decades, according to Bloomberg News.
Bill Ackman, the billionaire hedge fund manager, called on the US government to step in and bail out Silicon Valley Bank.
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