Regulators have closed down Silicon Valley Bank, the 18th largest bank in the US by assets, after it suffered a bank run following news of its liquidity issues. The bank had unexpectedly sold $21bn of its most liquid assets, borrowed $15bn and sought to organise an emergency stock sale to raise cash. However, withdrawals by tech start-ups, which make up the majority of the bank’s clients, followed the announcement, leading to trading halts in a number of banks, including crypto-friendly Signature Bank, whose shares dropped 27%, and Western Alliance Bancorp, whose shares fell 29%, despite news that it will acquire AmeriFirst Financial for $1bn. PacWest Bancorp saw its shares fall 37%, while First Republic Bank’s dropped by 30%. SVB Financial, SVB’s parent firm, is now seeking to sell the bank. All FDIC-insured deposits have been transferred from SVB to the Deposit Insurance National Bank of Santa Clara, with uninsured depositors due to receive certificates for the amounts of their uninsured funds. Insured depositors should have full access to their deposits by 13 March.
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