The collapse of Silicon Valley Bank has been felt across the nation – by businesses, politicians, and regular people alike.
So What Exactly Happened to Silicon Valley Bank?
By definition, a bank failure is the closing of an insolvent bank by a federal or state regulator. And in what is the United States second-largest bank failure, Silicon Valley Bank (SVB), the 16th-largest U.S. bank with over $200 billion in assets, was seized on Friday by California regulators after clients rushed to withdraw funds over concerns the institution might be going bankrupt.
As SVB mainly handles small business ventures and startups, most clients had over the insurable threshold of $250,000 in their accounts, leading to fears that they would not be able to access the entirety of their funds.
What Happens Next?
At 2 a.m this morning, Rep. Jeff Jackson from North Carolina posted a video to his official Tiktok account, saying that he was called into an emergency meeting last night on Zoom with several hundred members of Congress convened by the Treasury Department. He went on to state that “the purpose of the meeting was to announce extraordinary steps that will be taken to secure our financial system.” The government has issued statements that all funds will be accessible to their account holders. Leading regulators have gone on to say in their own joint statement, “today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system.”
The Federal Reserve has also stated that it is in the process of creating a new Bank Term Funding Program, a program with the intention of safeguarding institutions affected by the inherent market instability of the SVB failure.