That giant slurping sound on Friday was Silicon Valley Bank imploding. America’s 16th-largest bank had some $175 billion in deposits and disappeared by breakfast. It wouldn’t have happened if not for management mistakes. This was a 21st-century bank run—customers tried to withdraw about $42 billion, a quarter of all deposits. But what triggered the collapse?
After a dramatic weekend, regulators said the failed bank’s customers will have access to all their deposits starting Monday and set up a new facility to give banks access to emergency funds. The Federal Reserve also made it easier for banks to borrow from it in emergencies.
Silicon Valley Bank’s failure is the largest since Washington Mutual went bust in 2008, a hallmark event that triggered a financial crisis that hobbled the economy for years. The 2008 crash prompted tougher rules in the United States and beyond.
Shares in Silicon Valley Bank (SVB), a key lender to technology start-ups, plummeted on Thursday as investors moved to withdraw their deposits.
One venture capitalist told the BBC the day’s events were “wild” and “brutal”.
For many who have followed the Theranos saga, the podcasts, the documentaries, the books, you might have thought that Elizabeth Holmes’s conviction was nailed down.
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