Close Menu
  • Home
  • News
  • Business
  • Lifestyle
    • Entertainment
  • Travel
  • Tech
  • Living
  • Others
    • Housing
    • Jobs
    • Education
    • Community
    • Expat life
  • Abu Dhabi Week
X (Twitter)
  • Editorial Policy
  • About Us
  • Contact
X (Twitter)
Dubai Week
Subscribe
  • Home
  • News
  • Business
  • Lifestyle
    • Entertainment
  • Travel
  • Tech
  • Living
  • Others
    • Housing
    • Jobs
    • Education
    • Community
    • Expat life
  • Abu Dhabi Week
Dubai Week
  • Home
  • News
  • Business
  • Lifestyle
  • Travel
  • Tech
  • Living
  • Others
  • Abu Dhabi Week
Home»News»“Silicon Valley Bank” closure…biggest bankruptcy in the US since the 2008 crisis
News

“Silicon Valley Bank” closure…biggest bankruptcy in the US since the 2008 crisis

Nadia BarnettBy Nadia BarnettMarch 11, 2023No Comments4 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email

The crisis that engulfed Silicon Valley Bank (SVB), which was shut down by US authorities on Friday, sent a wave of panic across the banking sector. The financial crisis in 2008, according to the AFP and Network report “NBCAmerican.

The bank could not handle large withdrawals by its customers, especially those in the technology sector, and its efforts to raise capital quickly were not successful.

U.S. officials announced on Friday that they had shut down a “Silicon Valley bank” close to the tech community and found it suddenly insolvent, handing over responsibility for managing deposits. Federal Deposit Insurance Corporation (FDIC) in the United States.

The Federal Deposit Insurance Corp. in the U.S. plans to reopen the bank’s 17 branches in California and Massachusetts on Monday, allowing customers to withdraw up to $250,000 in a short period of time, the amount usually guaranteed. By company.

The California Financial Protection and Innovation Commission (DFPI) formally took over the bank, which the federal agency said was “sufficiently liquid and insolvent.”

At the end of 2022, the bank had $209 billion in assets and $175.4 billion in deposits.

Although better known to the public, Silicon Valley Bank was the 16th largest US bank by assets.

SVB’s closure represents the largest bank failure since Washington Mutual Savings Bank closed in 2008, but also the second largest retail bank failure in the United States.

US Treasury Secretary Janet Yellen confirmed on Friday that she was following the situation in the banking sector “closely” before announcing the bank closure.

The White House promises

In the markets, a wave of panic began, Thursday, after “SVB” announced that it was trying to quickly raise capital to repay the huge refunds made by its customers, which caused a loss of 1.8 billion dollars. Sale of securities.

The announcement caught investors by surprise and renewed concerns about the strength of the banking sector as a whole, especially as a rapid rise in interest rates led to a decline in the value of the securities in their portfolios.

The four biggest U.S. banks lost $52 billion in stock markets on Thursday, followed by Asian and European banks.

The White House, for its part, confirmed on Friday that it trusts the financial regulators’ decision.

Cecilia Ross, who chairs the White House Council of Economic Advisers, expressed confidence in regulators when asked about closing the bank.

Ross emphasized that the US banking system is fundamentally stronger than it was during the 2008 financial crisis.

In Paris, Societe Generale lost 4.49%, BNP Paribas 3.82% and Credit Agricole 2.48%. Elsewhere in Europe, Germany’s Deutsche Bank lost 7.35%, Britain’s Barclays 4.09% and Switzerland’s UBS lost 4.53%.

As for Wall Street, major banks rallied on Friday after retreating earlier in the day. Shares of JPMorgan Chase rose 2.3 percent in mid-day trading, while Bank of America and Citigroup edged closer to parity.

On the other hand, local banks such as First Republic and Signature Bank saw more strikes, with their shares falling 23% each.

Challenges

In a note, Christian Parisot of brokerage group Oriel BGC confirmed that investors “also saw an inverse effect of the interest rate curve on bank difficulties”, meaning when short-term rates are higher than long-term rates.

Banks generally borrow at short-term rates to provide loans at medium or long-term rates.

Another American team faces challenges. On Wednesday, the parent company of cryptocurrency operator Silvergate Bank announced that the company will be liquidated.

Stephen Innes, an analyst at SBI Management Group, said in a note that the likelihood of a “capital or liquidity-related incident between major banks” is “low”.

Since the financial crisis of 2008-2009 and the bankruptcy of the American “Lehman Brothers” bank, banks have to provide strong guarantees of authority to control national and European markets.

The European Banking Authority is subjecting the continent’s 50 largest banks to credit checks.

The results of the last test of this kind at the end of July 2021 revealed that financial institutions can withstand a severe economic crisis without serious damage.

For analysts at Morgan Stanley, “the financial pressures faced by SVB are very special and should not be taken as the norm for other domestic banks”.

“We do not believe the banking sector is facing a liquidity crunch,” they added in a note.

Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
Previous ArticleAccording to the Ministry of Health, smoking rates are highest among people aged 45 to 54.
Next Article UAE calls for global partnership to bridge gender digital divide
Nadia Barnett

"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

Related Posts

HPE unveils unified program to power up profitable growth for partners

June 30, 2025

FutureSec Summit’25 to Tackle AI, Digital Trust, and Cyber Resilience in Dubai

June 17, 2025

CNN Academy Abu Dhabi Opens Applications for Aspiring Media Talent

June 14, 2025

Top 10 Cleaning Companies in Dubai for 2025 by DubaiWeek

June 14, 2025
Business

du expands collaboration with Disney+ to offer exclusive streaming benefits for UAE customers

By Steve LaidlawJuly 11, 20250 Business

du aims to ensure that customers across the UAE will continue to enjoy a rich…

Pioneering Australian Agri-Tech, núaFEEDs, Set to Transform UAE Livestock Feed Sector and Tackle Food Waste Challenge

July 11, 2025

EC-Council Releases CEH Hall of Fame 2025 Industry Report

July 11, 2025

Dubai’s Luxury Real Estate Market Breaks Record with 62.7% Surge in AED 10M+ Sales in H1

July 11, 2025
X (Twitter)
  • About Us
  • Privacy Policy
  • DMCA
  • Editorial Policy
  • Contact
© 2025 Dubai Week

Type above and press Enter to search. Press Esc to cancel.