A bank that caters to many of the world’s most powerful tech investors collapsed on Friday and was taken over by federal regulators, becoming one of the largest lenders to fail since the 2008 Global Financial Crisis.
California’s banking regulators shut down Silicon Valley Bank and put it into receivership under the Federal Deposit Insurance Corp. (FDIC).
That effectively gives control of the bank to the FDIC, which created a new entity to oversee it.
Regulators announced the takeover after what was effectively a run on the bank. Depositors rushed to withdraw their money amid fears SVB wouldn’t be able to meet redemption requests.
It was a collapse that sent shockwaves across the banking industry, hammering shares of other smaller and regional lenders.
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