Arab Press

بالشعب و للشعب
Tuesday, Sep 17, 2024

Silicon Valley Bank: Biggest failure since 2008 financial crisis as US regulators close bank and seize assets

Silicon Valley Bank: Biggest failure since 2008 financial crisis as US regulators close bank and seize assets

Regulators swooped in the middle of the day to seize the bank's assets, in a sign of how quickly the bank fell into trouble. Investors in London are said to be "spooked".
US regulators have shut down the country's 16th largest bank, in the biggest collapse of a financial institution since the 2008 financial crisis.

Silicon Valley Bank failed after depositors - mostly technology workers and venture capital-backed companies - began withdrawing their money, creating a run on the bank.

The US Federal Deposit Insurance Corporation (FDIC) has seized its assets.

It said the bank had $209 billion (£173 billion) in assets and $175.4 billion (£146 billion) in deposits at the time of failure.

It was unclear how many of the deposits were above the $250,000 (£207,000) insurance limit.

The bank's downfall marks the largest failure of a US bank since Washington Mutual during the 2008 financial crisis.

The FDIC could not immediately find a buyer for the bank's assets, signalling how fast depositors had cashed out.

It also seized the bank's assets in the middle of the business day, a sign of how dire the situation had become.

The financial health of Silicon Valley Bank had been increasingly in question this week after the bank announced plans to raise up to $1.75bn dollars (£1.45 bn) in order to strengthen its capital position.

Silicon Valley Bank had acted as a major financial conduit for venture capital-backed companies, which have been hit hard in the past 18 months as the US Federal Reserve has raised interest rates and made riskier tech assets less attractive to investors.

The bank was heavily exposed to the tech industry but experts say there is little chance of knock-on effects in the banking sector as there was in the months leading up to the recession more than a decade ago.

Major banks have sufficient capital to avoid a similar situation.

In 2007, the biggest financial crisis since the Great Depression rippled across the world after mortgage-backed securities tied to ill-advised housing loans rippled from the US to Asia and Europe.

The panic on Wall Street led to the collapse of the storied Lehman Brothers, founded in 1847.

'Mild panic' as bank failure leaves investors 'spooked'

The City of London also felt the effects of the bank's collapse on Friday.

There were big market falls for the two biggest international banks on the FTSE 100, HSBC and Standard Chartered, which dropped more than 4.5%.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said there was a "state of mild panic" surrounding shares in the financial sector because of the Silicon Valley Bank news.

She said interest rate worries had also rattled investors but that the news from the US had them particularly "spooked".

The FTSE 100 closed down 1.7% at 7,748.35 points, a reduction of 131.63.

Markets were also down in the US where the S&P 500 had given back 0.7% of its value while the Dow Jones was trading down 0.4% shortly after trading ended in London.

France's Cac 40 and Germany's Dax indices both closed down 1.3%.

On currency markets the pound gained 1.1% against the dollar, trading at 1.205 by the close of play on stock markets.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
UN Debates Resolution on Israeli Occupation, Houthi-US Controversy, and Global Tensions Escalate
Zimbabwe Culls Elephants Amid Drought, as Mali, Papua New Guinea, and Gaza Grapple with Crises
Hamas Leader Yahya Sinwar Discusses Extended Conflict Preparedness
Israel Expands Gaza War Objectives Amid U.S. Plot Unveiling, UK Fiscal Plans, and Climate Change Warnings
Nation in Turmoil: Key Moments from Libya, Niger, Gaza, and a U.S. Assassination Plot
Palestinian President's Madrid Visit Marks Key Diplomatic Move Amid Regional Crises and Global Tensions
**Global Affairs Roundup: Key Diplomatic Updates from Egypt, Spain, Iran, and International Security Concerns**
Global Turmoil: Philippines Stands Firm in South China Sea, Nigeria Faces Floods, Russia Evacuates Border, Polio Threats in Afghanistan, UN Warns Israel, and Netanyahu Mulls Cabinet Shakeup
Iran's President Pledges Reforms on Morality Police and Internet Restrictions
UN Chief Criticizes Israel's Collective Punishment of Palestinians
Polio Vaccination Campaign Achieves 90% Coverage in Gaza Amid Conflict
Bail Granted to PTI Lawmakers Amidst Political Crackdown; Global Tensions Rise with Drone Downing and Middle East Conflict
Indian Police Detain Striking Workers at Samsung Plant Amid Labor Unrest in Tamil Nadu
New Biometric Passports Support Sahel States Unification Amidst Jihadist Turmoil
Hamas Claims Strong Capability to Continue Gaza War
Houthis Launch First Ballistic Missile Strike on Israel
Hamas Aims for Joint Rule in Gaza Amid Conflict; Global Turmoil and Hope in 2024
Tokyo Student Shaves Head in Solidarity with Palestinians amid Global Tensions
Israel Vows Retaliation Over Yemen Missile, Philippines Named Top Disaster Risk for 2024, and Global Geopolitical Tensions Rise
Iranian President to Attend BRICS Summit Amid Rising Tensions, Venezuela Arrests Foreign Nationals, and the Passing of Lebanese Novelist Elias Khoury
Global Shifts: Yemeni Missile Strikes Israel, China Adjusts Retirement Age, NATO Supports Ukraine, and Europe Battles Storm Boris
Nigerian Troops Rescue 13 Hostages; G7 Condemns Iran’s Missile Exports; Global Events Highlight Tensions and Struggles
Iran Denies Arms Export Allegations as Tensions Rise with Western Nations; Israeli Protests Demand Hostage Release
Global Crises: Train Tragedy in Egypt, Escalation in Israel-Hezbollah Conflict, and Deadly Airstrike in Gaza Amid Rising Tensions
Turkish Authorities Arrest Daesh Militant Suspected in Deadly Istanbul Church Attack; Global Political and Security Developments Unfold
Modi Declares 'Terrorism on its Last Legs' Amid Global Turmoil: Key Updates from Kashmir to Ukraine
Global Tensions Rise: North Korea-Russia Alliance Strengthens, Iran Launches Satellite Amid Middle East Strife, and EU Salvages Greek Tanker Attacked by Houthis
Global News Roundup: Mpox in Morocco, German Naval Passage Sparks Tension, Congo’s Death Sentences, Iran’s Hijab Defiance, Fujimori’s Legacy, and Myanmar’s Plea for Aid
Swift Evacuations in Springfield Amid False Bomb Threats, South Africa Proceeds with Genocide Case Against Israel, Strikes and Political Tensions in U.S. and Beyond
Turkiye Mourns Murder of Young Girl; Global Headlines Include Nigerian Flood Crisis, Tunisian Arrests, Iraq and Gaza Strife, and Ukraine Diplomacy
Escalating Conflicts in the West Bank, Lebanon, and Ukraine: A Global Perspective on Violence and Political Tensions
UK Introduces £10 Electronic Travel Authorization Amid Global Turmoil: Zelensky's Peace Plan, Middle East Tensions, and Argentina's Aviation Strike
Taliban Bans MMA, WHO Approves First Mpox Vaccine, UK's Largest Child Abuse Investigation Yields Convictions, Dutch Migration Controls Tighten, NATO Condemns Russian Missile Strike, and London's Migration Museum Celebrates Immigrant Contributions
Iran's Repression of Women Intensifies, Global Protests, and High-Stakes Diplomatic Efforts Mark A Day of Geopolitical Turmoil
Global Headlines: Quiboloy's Plea, Taiwan's F-16V Arrival, Hezbollah-Israel Clashes, Zambada's U.S. Arraignment, German Naval Movement, Morocco Flooding
Typhoon Yagi Devastates Southeast Asia while Global Tensions Rise: A Rundown of Major Events
Global Unrest: Israeli Strike Kills Child, Russia Expels British Diplomats, Sweden's Migration Policy, and More
PETA Condemns Real Bearskin Caps at Buckingham Palace, Offers Faux Alternatives Amid Soaring Costs and Global Turmoil
Biden Marks 30 Years of Violence Against Women Act; Global and Domestic Turmoil Heighten Tensions
Israel's Elite Unit 8200 Chief Resigns Amid Post-Hamas Attack Turmoil, Global Political Updates Follow
UN Struggles to Resolve Libya’s Central Bank Crisis Amid Broader Regional Turmoil; Salman Rushdie's Memoir Nominated for National Book Awards
Russian Attack on Red Cross Vehicles in Ukraine Highlights Humanitarian Risks; Notre Dame's Reopening Offers Glimmer of Hope Amid Global Crises
Global Outcry Follows Deadly Israeli Airstrike on Gaza School Amid Escalating Regional Conflicts and Cultural Looting
Turkiye Calls for UN Inquiry into Activist's Death Amidst Middle East Tensions
Global Justice, Economic Reforms, and War: Key Issues Captivating the World
Turkiye Condemns US-Cyprus Defense Pact Amid Escalating Global Tensions and Conflicts
Haitian Immigrants Boost Springfield’s Economy Amid Misinformation and Unity Efforts
International Outcry Over Shooting of Turkish-American Activist; Global Leaders Demand Accountability
Iranian President Criticizes Western Support for Israel in First International Trip to Baghdad Amid Tensions
Iran Denies Missile Deliveries to Russia Amid New Sanctions
×