What’s Going On With Silicon Valley Bank?

It's the first bank to be closed by regulators since 2020

Silicon Valley Bank
Regulators recently shut Silicon Valley Bank down.
Tayfun Coskun/Anadolu Agency via Getty Images

On Friday, the Federal Deposit Insurance Corporation announced that regulators had shuttered Silicon Valley Bank. It’s the first time an institution insured by the FDIC closed in over two years — and, given the relatively high profile of Silicon Valley Bank, which was used by a number of prominent tech companies, this news has left many observers with reactions ranging from confusion to panic.

If you’ve been wondering about Silicon Valley Bank and whether or not you should be alarmed, read on for some resources that might help provide some answers.

How large was Silicon Valley Bank? As per the FDIC, “Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits” as of the end of 2022. That made it the nation’s 16th largest bank — and makes its collapse the second-largest bank failure in the nation’s history.

Second-largest, you say. What was the largest? That would be Washington Mutual, in 2008. You may recall that as part of the larger financial crisis that took place that year — and memories of that are one of the reasons why Silicon Valley Bank’s shuttering is so unnerving.

Who were some of Silicon Valley Bank’s clients? As you might guess from its name, Silicon Valley Bank worked with a lot of technology companies. A recent report at The Daily Beast noted that the bank’s closure has affected everything from payments for Etsy sellers to corporate credit cards at Vox Media. Vox’s own explainer is well worth checking out, both due to its comprehensiveness and for its own very close proximity to the issue at hand.

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What’s next for people and companies who had money deposited at Silicon Valley Bank? According to the FDIC, “[a]ll insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023.” It’s worth noting here that the FDIC insures deposits up to $250,000. For those companies with larger amounts than that at Silicon Valley Bank, the agency in question states that it “will pay uninsured depositors an advance dividend within the next week.”

When was the last time an FDIC-insured bank was shuttered? Late in 2020, when Alamena State Bank in Kansas was closed by regulators. It was, as per this article, the fourth bank to be closed in 2020. It’s worth noting, though, that the total number of deposits there was significantly smaller than the total amount in the Silicon Valley Bank shuttering.

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