Silicon Valley Bank: Silicon Valley Bank’s parent company has declared bankruptcy, nearly a week after US regulators rushed in and confiscated the bank’s assets following a run on deposits that rendered the medium-sized bank unviable on its own. The bankruptcy procedure will be distinct from the Federal Deposit Insurance Corporation’s (FDIC) sale of Silicon Valley Bank’s (SVB) assets. The FDIC is an independent organisation that ensures the stability and public confidence in the US banking system.
Second largest failure of a retail bank in the United States
SVB specialised in startup funding and had grown to become the 16th largest US bank by assets by the end of 2022, with $209 billion in assets and around $175.4 billion in deposits. Its fall is not only the largest bank failure since Washington Mutual in 2008, but also the second largest failure of a retail bank in the United States.
Hundreds of Indian companies have invested
According to Union Minister Rajeev Chandrashekhar, hundreds of Indian companies have invested more than a billion dollars in SVB. Mr Chandrashekhar stated that he spoke with over 460 stakeholders this week, including startups affected by SVB’s closure, and that he had passed on their recommendations to Finance Minister Nirmala Sitharaman. Mr Chandrashekhar mentioned one of the recommendations he had passed on to the Finance Minister: Indian banks might give a deposit-backed credit line to startups that had money in SVB, using those as security.
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