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On March 10, Silicon Valley Bank, one of the most prominent lenders in the start-up ecosystem, collapsed. Federal regulators stepped in to allay fears and limit risk in the broader financial system.
Here is a timeline of major events related to the bank’s collapse and its aftermath.
March 8
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Silvergate Capital, a cryptocurrency-focused bank, announced it would cease operations and liquidate its assets after a bank run forced the California lender to sell a chunk of its debt securities.
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Silicon Valley Bank concerned investors when it said it needed to shore up its balance sheet and raise $2 billion in capital. It was forced to sell a bond portfolio at a $1.8 billion loss.
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In a letter to customers, Greg Becker, the chief executive of Silicon Valley Bank, said the bank enjoyed the “financial position to weather sustained market pressures,” but he noted that customer deposits had come in lower than forecast in February. Moody’s, a credit ratings firm, downgraded the bank’s bond rating and slashed its outlook to negative, from stable.
March 13
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President Biden, in a speech, said the U.S. banking system was safe and insisted taxpayers would not pay for any bailouts. “This is an important point,” Mr. Biden emphasized. “No losses will be borne by the taxpayers.”
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Regional bank stocks plunged, with First Republic taking the worst beating, dropping 60 percent.
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HSBC said it would buy Silicon Valley Bank’s British subsidiary. A buyer was being sought for Silicon Valley Bank’s holding company, which includes asset management and a securities division, and excludes the commercial bank now under F.D.I.C. control.
March 14
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Bank stocks recovered some of their losses.
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The Justice Department and the Securities and Exchange Commission reportedly opened investigations into the collapse of Silicon Valley Bank.
March 15
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Shares of Credit Suisse tumbled by 24 percent, a record low. The Swiss National Bank, Switzerland’s central bank, said it would step in to provide financial support to Credit Suisse if necessary.
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On Wall Street, the S&P was down by 0.6 percent at the close of trading, reversing some of the previous day’s rally as investors’ fears over the health of the banking industry resurfaced.
March 16
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First Republic Bank received $30 billion in deposits from nearly a dozen of the United States’ biggest banks including JPMorgan Chase, Wells Fargo and Morgan Stanley. The beleaguered bank’s shares closed up 10 percent.
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Credit Suisse said it would borrow $54 billion from Switzerland’s central bank.
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The Federal Reserve announced that, as of Wednesday, banks had borrowed $11.9 billion from the emergency loan program it unveiled on Sunday to shore up the banking system.
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Janet L. Yellen testified before the Senate’s Finance Committee and sought to reassure the public that America’s banks remain “sound.”
Carly Olson contributed reporting.
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