The failure of California-based Silicon Valley Bank brought into focus the impact of a relentless campaign of interest rate hikes.

The U.S. Federal Reserve increased interest rates several times from near “Zero” to 4.5% by February 2023.

Rising interest rates lowered the value bonds and Silicon Valley Bank made a $1.8 billion loss from the sale of securities in starting of March 2023.

This triggered the biggest investors pulled a staggering $42 billion from the lender. The Bank could not meet the demand for this withdrawal of funds and collapse.

SVB bank collapsed due to a lack of funds to meet the demand of the withdrawal followed by another US regional bank - Signature Bank

The fallout of the collapse spread to Silicon Valley Bank’s parent company SVB Financial Group, that filed for bankruptcy on 17th March 2023.

Federal Deposit Insurance Corp had asked banks interested in acquiring Silicon Valley Bank and Signature Bank

Finally Acquired

SVB was the largest bank collapse since 2008

First Citizens scoops up SVB for up to $500 mln in stock

Finally

Customers of SVB will automatically become customers of First Citizens

First Citizens will assume Silicon Valley Bank's assets of $110 billion, deposits of $56 billion and loans of $72 billion as part of the deal.

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