Wednesday, July 8, 2026

Silicon Valley Bank collapses, U.S. govt takes over

The bank, which serves some of the world’s most well-known tech investors, became one of the biggest banks to fail since the global financial crisis of 2008.

• March 11, 2023
Silicon Valley Bank
Silicon Valley Bank [Credit: Getty Images]

The United States government has taken control of Silicon Valley Bank after it collapsed on Friday.

The bank, which serves some of the world’s most well-known tech investors, became one of the biggest banks to fail since the global financial crisis of 2008.

The tech lender was shut down by California regulators, who then gave The Federal Deposit Insurance Corporation control of it. As receiver, the FDIC will normally sell off the bank’s assets to reimburse its clients, including depositors and creditors.

Less than two days before, the bank had startled Wall Street and its depositors with desperate attempts to borrow money in order to prevent a collapse due to withdrawal requests and a sharp decrease in the value of its investment holdings. 

New York Times reports that a person with knowledge of the conversations said that as of Friday morning, the bank was collaborating with consultants on a prospective sale and had stopped trading in its shares following a sharp decline.

The National Bank of Santa Clara was established by the FDIC to hold the deposits and other assets of the failing bank. In a press release, the regulator stated that the new organisation would begin operations on Monday and that cheques written by the defunct  bank would continue to be honored.

Customers whose accounts exceeded the $250,000 insurance cap set by the F.D.I.C. would receive certificates for their uninsured funds, making them among the first in line to receive repayment from funds recovered while the F.D.I.C. is holding Silicon Valley Bank in receivership, even if only partially.

Although Silicon Valley Bank’s problems have been building for more than a year, they suddenly worsened this week. The Santa Clara, California-based bank was established in 1983 and was a preferred lender for entrepreneurs and their executives.

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