USA First Reporting
By USA First Reporting
During a tense poker game in the early 1980s, a brilliant concept to create a financial institution that catered particularly to emerging tech firms was created. This ground-breaking idea came to life as the internationally recognized Silicon Valley Bank (SVB), which has locations in nations including China, Israel, and Canada. However, after an unexpected sale of their bond assets, SVB faced a severe collapse, losing significant clients, and necessitating government intervention.
Some people blame the former president Donald Trump for the tragedy, claiming that his easing of regulatory restrictions could have preserved the SVB’s ability to operate.
Taking apart the SVB Collapse
SVB generated a substantial profit, according to the California Department of Financial Protection and Innovation. “total assets of approximately $209 billion and total deposits of approximately $175.4 billion” on December 31, 2022. The value of the bonds plummeted when the Fed increased interest rates, despite the fact that it had billions of dollars held up in Treasury bonds. In addition, when their IT firms failed, several consumers withdrew money from the bank.
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