Silicon Valley Bank (SVB)
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Silicon Valley Bank was a Santa Clara, California bank founded in 1983 that became the financial backbone of the startup economy, serving venture capital firms and technology startups. By the end of 2022 it held about $209 billion in assets, making it the 16th-largest US bank.
02 / Silicon Valley Bank (SVB) FAILURE REASONS
Failure reasons
SVB failed on classic interest-rate risk amplified by social media. A pandemic-era deposit surge was parked in long-duration bonds; when rates rose, the portfolio carried large unrealized losses. On March 8, 2023 the bank announced it had sold $21 billion of securities at a $1.8 billion realized loss and would raise emergency capital. A social-media-driven bank run withdrew about $42 billion in a single day. Regulators closed the bank on March 10 and the FDIC took receivership.
03 / EVENT HISTORY
Events in the structured record
- Company founded
Silicon Valley Bank is founded in Santa Clara to serve technology startups and venture investors.
- Peak funding round
The bank ends 2022 with about $209 billion in assets, the 16th-largest bank in the US, after a pandemic deposit boom.
- Workforce reduced
On March 8, 2023 SVB announces a $21 billion securities sale at a $1.8 billion loss and an emergency capital raise; $42 billion is withdrawn the next day.
- Closure announced
On March 10, 2023 regulators close the bank and the FDIC takes receivership; on March 26 most assets are sold to First Citizens Bank.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Deposit boom parked in long-duration bonds; rates rose, losses mounted
- 02
March 8, 2023: $21B securities sold at a $1.8B realized loss
- 03
Social-media-amplified bank run: $42B withdrawn in one day
- 04
Regulators close the bank March 10; FDIC sells assets to First Citizens