The shutdown of Silicon Valley Bank (SVB), which finances many tech players, caused panic around the world before the start of the weekend. The memory of the Lehman Brothers affair in 2008, which precipitated banks around the world in its downfall, shook the banking sector.
This is the biggest bank failure in the United States since the financial crisis of 2008. The descent into hell of Silicon Valley Bank, explained following it failed to cope with massive withdrawals of its customers, mainly tech players.
Yet by the end of 2022, the bank had $209 billion in assets and around $175.4 billion in deposits, according to US officials, and it was the 16th largest US bank by asset size.
Closed Friday by the American authorities, this announcement caused panic in the banking sector in the United States and in the world.
US Treasury Secretary Janet Yellen called several financial sector regulators on Friday to discuss the situation, reminding them that she had “full confidence” in their ability to take appropriate action and believed that the banking sector remains ” resilient “.
The control of its deposits has been entrusted to the American agency responsible for guaranteeing them (FDIC), which intends to reopen on Monday the 17 branches of the bank, located in California and Massachusetts.
The FDIC also plans to allow customers to withdraw up to $250,000 in the short term, the amount usually guaranteed by the agency, while those with more should contact the agency.
Ahead of the announcement of the closure, the panic began on Thursday when the bank announced that it was looking to raise capital quickly to meet the massive withdrawals of its customers.
Wall Street immediately felt the effects of this news, where the four largest American banks lost $52 billion on Thursday. JPMorgan Chase took 2.5% at the end of the session while Bank of America and Citigroup lost less than 1%.
Same echo in the world, since on the Paris stock exchange, Societe Generale lost this Friday 6.19% while Deutsche Bank won 8.83% in Frankfurt.
In Britain, the British Treasury wanted to be reassuring on Saturday, saying that the problems of the American bank were “specific” and had “no implications for other banks operating in the United Kingdom”, while the government is meeting with representatives of the tech sector to address their “concerns”.
“The British banking system”, one of the largest in the world, “remains strong and resilient”, added the Treasury in its press release.
