United States: the bank of Silicon Valley start-ups closed by authority
The headquarters of Silicon Valley Bank (SVB) in Santa Clara, California, this Friday, March 10, 2023. AP - Jeff Chiu
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1 min
Ultra-rapid collapse of a California bank popular with Silicon Valley start-ups.
The American banking regulator took control of Silicon Valley Bank (SVB Financial Group) and closed the establishment on Friday March 10.
It all happened in a few hours.
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With our correspondent in Washington,
Guillaume Naudin
Before the opening of quotations on Friday, the bank's share price fell by 60%.
In question, the announcement by itself the day before that it was seeking to raise money to finance the withdrawal requests of its depositaries, for the most part the big names in Silicon Valley.
Clearly, it is a movement of banking panic: a race towards the counter to recover its funds.
The bank had massively acquired US Treasury bonds a year ago to remunerate its customers with a safe investment.
Sure, but not so competitive anymore.
In the meantime, the US Federal Reserve (Fed) has raised its rates and gives every indication that it will continue.
In other words, the Treasury bonds issued today yield much more than those of yesterday.
Customers know this and therefore intend to take advantage of it.
They came to get their money to put it elsewhere.
They will only see him again very modestly at first.
The regulator says the bank will reopen on Monday for customers to withdraw their guaranteed investments, which amount to $250,000 per customer.
In total, a total of 175 billion dollars were deposited by all customers accustomed to seeing money flow freely.
What they see again will depend on what the liquidation of the bank brings.
The US federal state confident in the face of the situation
In a press release, US Treasury Secretary Janet Yellen announced that she had "
convened
" several banking and financial sector regulators to discuss the situation after the closure of the SVB bank by the US authorities on Friday.
Joe Biden's Minister of Economy and Finance received officials from the central bank, the Fed, but also from the American agency responsible for guaranteeing deposits (FDIC) and from another sector regulator, the Office of the Comptroller of the Currency (OCC), “
to discuss developments around Silicon Valley Bank
”.
And to express “
its full confidence in the banking regulators to take the appropriate measures
”.
The Treasury Secretary notes that “
the banking system remains resilient and that regulators have effective tools to deal with this type of event
”.
►Also read Stock market: bank shares destabilized by the difficulties of SVB Financial Group
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