On Friday morning, California regulators shut down Silicon Valley Bank (SVB), the 16th largest bank in the US and the second largest to close since 2008. The closure was announced by the Federal Deposit Insurance Corporation (FDIC), which appointed itself as the receiver of the bank's insured deposits. SVB caters to the venture capital community, with 17 branches in California and Massachusetts.
Gov. Gavin Newsom has been in contact with the highest levels of leadership at the White House and Treasury, with the aim of stabilizing the situation as quickly as possible and protecting jobs, people's livelihoods and the innovation ecosystem. The FDIC will provide insured depositors with access to their accounts by Monday morning, and an advance dividend to uninsured depositors within the week. The amount of deposits above the FDIC's insurance limit has yet to be determined.
Other bank stocks were also affected by the closure, as the US regulators have also warned banks of heightened liquidity risks in crypto-related deposits.