On Thursday, shares of all kinds of lenders, including the big banks, sagged. Though the problems appear to be isolated at SVB, the run on the bank sparked concerns about the banking sector as a whole. Shares of Silicon Valley Bank slumped before it was taken over by the FDIC. Getty Images Traders working at the New York Stock Exchange (NYSE) on Main New York City. Trading was halted on Friday morning, and by midday, SVB had been taken over by the FDIC. The bank's stock price fell by 60% on Thursday, and as its share price continued to sink overnight. That led to a major slump in SVB's shares. Bonds and stocks have been hammered since last year, as the Federal Reserve has raised interest rates aggressively, and SVB also noted it wanted to pare down its bond portfolio to avoid further losses.īut that announcement spooked the bank's clients, who got worried about SVB's viability, and then proceeded to withdraw even more money from the bank - a textbook definition of a bank run.

SVB said earlier this week, that in order to make good on those withdrawals, it had to sell part of its bond holdings at a steep loss of $1.8 billion. That filled the lender's coffers, and SVB had about $174 billion in deposits.īut in recent months, many of Silicon Valley Bank's clients had been withdrawing money at a time when the tech sector as a whole has been suffering. Silicon Valley's business boomed as tech companies did well during the pandemic. The bank suffered a run on deposits that led to its collapse. Getty Images People walk through the parking lot at the Silicon Valley Bank headquarters in Santa Clara, Calif., on March 10, 2023.

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