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We Just Witnessed the Largest U.S. Bank Failure since the Global Financial Crisis
Silicon Valley Bank (SIVB) Shares Dropped Over 60% Before Trading was Halted
The Effect was Felt Throughout the Financial Sector
In the Past 5 Days:
* PacWest Bancorp is down 51%
* Charles Schwab is down 23.75%
* Bank of America is down 11.9%
* Goldman Sachs is down 8.08%
* JPMorgan is down 7.88%
What Happened?
\- Late Wednesday, Silicon Valley Bank surprised the market by announcing it needed to raise $2.5 billion in stock. The bank had been forced to sell all of its available-for-sale bonds at a $1.8 billion loss as its startup clients withdrew deposits, it said.
\- It's reported Friday morning that the efforts to raise capital had failed and that SVB had pivoted toward a potential sale.
\- SVB failed on Friday after it couldn't find a buyer, with the Federal Deposit Insurance Corp. taking over its assets and liabilities
\- SVB was a major bank for venture-backed companies, which were already under pressure due to higher interest rates
\- This marks the largest U.S. bank failure since the global financial crisis more than a decade ago
Silicon Valley Bank (SIVB) Shares Dropped Over 60% Before Trading was Halted
The Effect was Felt Throughout the Financial Sector
In the Past 5 Days:
* PacWest Bancorp is down 51%
* Charles Schwab is down 23.75%
* Bank of America is down 11.9%
* Goldman Sachs is down 8.08%
* JPMorgan is down 7.88%
What Happened?
\- Late Wednesday, Silicon Valley Bank surprised the market by announcing it needed to raise $2.5 billion in stock. The bank had been forced to sell all of its available-for-sale bonds at a $1.8 billion loss as its startup clients withdrew deposits, it said.
\- It's reported Friday morning that the efforts to raise capital had failed and that SVB had pivoted toward a potential sale.
\- SVB failed on Friday after it couldn't find a buyer, with the Federal Deposit Insurance Corp. taking over its assets and liabilities
\- SVB was a major bank for venture-backed companies, which were already under pressure due to higher interest rates
\- This marks the largest U.S. bank failure since the global financial crisis more than a decade ago
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