Key Takeaways
- Silicon Valley Bank (SVB) has collapsed, leaving many companies in the startup and tech sector worried about whether they’ll be able to make payroll this week
- It comes as a result of a run on the bank, with a liquidity crunch meaning SVB was unable to access cash to meet withdrawals
- Treasury Secretary Janet Yellen has ruled out a full bail out, saying that ‘We’re not going to do that again”
It’s been a crazy few days for the banking industry. Specifically, for Silicon Valley Bank and its shareholders, as it went from supposedly stable and solvent, to closed down by the regulators — in the space of just over 24 hours.
In a series of risk management oversights, macroeconomic factors and the good old fashioned rumor mill, Silicon Valley Bank (SVB) went through a liquidity crisis, causing a bank run on their deposits.
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