NEWS ALERT: Second-Biggest Bank Failure in History Sparks Fear

( – BREAKING NEWS NOW: Silicon Valley Bank’s sudden failure has caused market chaos and raised concerns about a broader contagion that could potentially harm the US banking sector.

The 40-year-old lender to startups and venture capitalists was abruptly shut down by the California Department of Financial Protection and Innovation. Its remaining assets were placed under the control of the Federal Deposit Insurance Corp (FDIC).

Silicon Valley Bank experienced a rapid downfall after disclosing a $1.8 billion loss on its bond holdings.

Despite CEO Greg Becker’s appeal for investors to stay calm, jittery clients were already withdrawing large balances exceeding the FDIC’s insured caps. The FDIC assured insured depositors that they would have full access to their insured deposits by Monday morning and that official checks would continue to clear.

The crisis has prompted warnings from market influencers such as Michael Burry of “The Big Short” fame, who tweeted, “It is possible today we found our Enron.” Billionaire Peter Thiel’s Founders Fund and other tech leaders had urged startups to remove their cash or risk losing it all before the bank failed. Hedge fund billionaire Bill Ackman called for a government bailout of the bank.

The bank’s failure marks the largest since the Great Recession and the second-largest of all time in terms of assets, trailing only Washington Mutual. The chaos caused by the bank’s collapse could spread to other institutions and hurt the broader economy. Christopher Whalen, chairman of Whalen Global Advisors, said, “It has a ripple effect and other smaller banks may suffer.”

Trading of SVB Financial shares remained halted following a CNBC report that the firm was attempting to sell itself. The bank had sought the assistance of advisers after failing to raise capital. Goldman Sachs had worked on a deal to sell shares at $95, but the arrangement fell apart as more investors withdrew their funds.

The rapid insolvency of the bank led to a sharp selloff in US stocks, with shares of major banks such as Goldman Sachs and Bank of America among those affected. Karl Schamotta, chief market strategist at Corpay, said, “Investors are fearing a repeat of 2008-style dynamics, and this selloff in the banking sector has raised fears of systemic risk.”

Silicon Valley Bank, which according to its website, “banked nearly half of all US venture-backed startups,” has not responded to multiple requests for comment. Notable firms listed as SVB customers include Pinterest, ZipRecruiter, and Shopify. In New York, police were reportedly called to a local SVB branch after depositors attempted to withdraw their money. One tech CEO, Ashley Tyrner, described the situation as “the worst 18 hours of my life” after being unable to access an SVB account where she had at least $10 million in deposits.


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