Silicon Valley Bank Collapse: FDIC to Insure Deposits by Monday Morning

On Friday, March 10th, Silicon Valley Bank (SVB) became the second-largest bank failure in US history, when the California Department of Financial Protection and Innovation shut the bank down, appointing the Federal Deposit Insurance Corporation (FDIC) as receiver.[0] The FDIC has said that insured depositors will have access to their funds by Monday morning, and uninsured depositors will receive an advance dividend within the next week.

The collapse of Silicon Valley Bank, considered a financial pillar of the tech industry, came after a bad bet on interest rates caused painful paper declines in its investments, forcing the bank to sell securities at an actual loss. This caused panic amongst depositors, leading to a run on the bank.[1]

SVB had established itself as the preferred bank for tech-focused start-ups and their venture capital investors, and the bank itself claimed at the end of 2022 that “nearly half” of all U.S. venture-backed startups used its services.[2] The bank was heavily dependent upon the tech sector for both its depositors and its customers, and when tech companies began burning through cash, it put pressure on SVB.

The higher interest rates also forced SVB to sell its battered government bonds at a loss to make good on customer withdrawals, leading to a $1.8 billion loss.[3] This caused a further panic and resulted in $42 billion in deposits being withdrawn on Thursday.[4] The FDIC has said that customers will have full access to their insured deposits up to $250,000 by Monday morning, while uninsured depositors will be paid through an advance dividend within the next week.

Meanwhile, crypto-focused lender Silvergate Capital also announced Thursday it would shut down, following turmoil in digital assets.[5]

The collapse of Silicon Valley Bank is a reminder that the tech industry is bruised and shaken, but holds too much potential to be written off. A new bank, the Deposit Insurance National Bank of Santa Clara, has been established in the wake of the collapse.[4]

0. “Takeaways from America's second-largest bank failure” CNN, 11 Mar. 2023,

1. “Opinion | Silicon Valley Bank’s collapse reflects the tech sector’s deep anxiety” The Washington Post, 11 Mar. 2023,

2. “Most of Silicon Valley Bank's Deposits Were Uninsured” TIME, 10 Mar. 2023,

3. “Why Silicon Valley Bank's crisis is rattling America's biggest banks” Yahoo News, 10 Mar. 2023,

4. “Silicon Valley Bank failure raises fear of broader financial contagion” The Washington Post, 11 Mar. 2023,

5. “Wall Street banks including JPMorgan, Bank of America see $55B value wipeout” Markets Insider, 10 Mar. 2023,

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