On January 28, 2020, the Silicon Valley Bank, a financial institution known for its role in the development of the technology sector, suddenly and unexpectedly announced its closure. The bank provided a wide range of services to a variety of clients, from venture capitalists to startups, but the announcement of its closure stunned many in the business world.
The bank cited a “deterioration in liquidity” as the primary reason for its closure, though the exact cause of the liquidity issues remain unclear. Some reports suggest that the bank may have taken on too much risk in recent years, while others point to a shift in the banking landscape that has seen traditional lenders losing ground to new digital banks.
Whatever the cause, the closure of the Silicon Valley Bank has sent shockwaves through the technology sector. Many of the bank’s clients were tech startups, and its closure leaves them without access to the financing that helped them get their products to market. With the bank gone, these startups may find it difficult to secure the capital they need to grow and succeed, leaving them in a precarious position. The closure of the Silicon Valley Bank also has broader implications for the tech sector. The bank was known for helping to foster innovation in the industry, providing venture
On Friday, March 10, 2023, Silicon Valley Bank, Santa Clara, CA was closed by the California Department of Financial Protection & Innovation. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
To protect the depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB) to allow depositors access to their insured deposits and time to open accounts at other insured institutions.