Who saw this coming?
Silicon Valley Bank (Photo: ShutterStock)
Are we on the brink of a severe economic crisis?
It may very well be.
Silicon Valley Bank, the "startup bank" of the USA, may be closed, in what looks like the biggest bank collapse since the collapse of Lehman Brothers in 2008. As you remember, on Thursday the bank's stock
fell by 60 percent, following heavy customer withdrawals draining it of its assets. On Friday, further declines of over 60 percent were recorded before trading and was halted even before the opening bell. Trading was volatile and the markets finally turned red, although not as decisively as yesterday, as the published employment report indicated 300,000 jobs More than planned.
In the meantime, the regulator announced that the bank's operations are suspended, and customers whose money is insured (not all funds are insured) will be able to withdraw their money until Monday. The bank's branches will be opened under regulatory supervision. The regulatory insurance covers only up to $250,000 per customer.
The companies are obviously worried, since no one knows what will happen to the money.
Many companies, including dozens of Israeli startups, invested their money in the bank.
It should be noted that until December, the bank's assets stood at approximately 210 billion dollars, of which 174 billion were from customer deposits.
The multiple pulls resulted in a rapid dive.
The previous bank of this size to collapse was Washington Mutual in 2008.
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