Silicon Valley Bank (English: Silicon Valley Bank, abbreviation: SVB) was once a large commercial bank in the United States, headquartered in Santa Clara, California. Silicon Valley Bank is one of the largest banks in the United States and is the bank with the largest local deposits in Silicon Valley. On March 10, 2023, U.S. regulators closed Silicon Valley Bank and the Federal Deposit Insurance Corporation took over bank deposits, becoming the second largest bank failure in U.S. financial history after Washington Mutual. On March 26, 2023, First Citizens Bank acquired Silicon Valley Bank, which now operates as a division of First Citizens Bank.

Silicon Valley Bank specializes in providing loans to technology companies, provides multiple services to venture capital, income-based financing, and private equity firms investing in technology and biotech, and provides private banking services to high net worth individuals in its home market. In addition to taking deposits and making loans, the bank operates venture capital and private equity divisions, which sometimes invest in the firm's clients.

History

Founded in 1982 in San Jose, California, USA, listed on the NASDAQ in 1988, opened a branch on the East Coast of the United States in 1990, and provided venture capital to Cisco Systems in mid-1990. In 1995, it moved its headquarters to Santa Clara, California. In 2000, it opened a branch in Florida. In 2004, it opened overseas branches in Bangalore, India and London, England. In 2005, it entered Beijing, China and Israel.

In August 2012, Shanghai Pudong Development Bank and Shanghai Pudong Development Bank each invested 50% in Shanghai to establish the first Sino-US joint venture bank - Shanghai Pudong Development Silicon Valley Bank. In July 2015, it was approved by the China Banking and Insurance Regulatory Commission to start RMB business.

2023 Bankruptcy

Main entry: Silicon Valley Bank Failure Event

Later on March 9, 2023, Silicon Valley Bank's parent company surprised the market by saying it had sold about $21 billion of securities in its portfolio, which would result in a $1.80 billion after-tax loss for Quarter 1. The bank also sold $1.25 billion of common stock and $500 million of convertible preference share securities. Following the news, several venture capital firms, including Founders Fund, Coatue Management, and Union Square Ventures, advised their portfolio companies to divest from Silicon Valley Bank, leading to a bank run. The share price of SVB Financial Group, the parent company of Silicon Valley Bank, plunged by 60% that day, driving down the shares of US banks and the three major US stock indexes. On March 10, the California Department of Financial Protection and Innovation, the regulator, was shut down on the grounds of illiquidity and insolvent, and the Federal Deposit Insurance Corporation took over bank deposits. The failure of Silicon Valley Bank was the largest bank since the 2008 financial crisis and the second largest bank failure in US history. On March 12, the Biden administration announced that all Silicon Valley Bank depositors could withdraw their full deposits on the morning of the 13th, but investors and bank managers would bear the risk.

On March 13, 2023, HSBC bought the UK arm of SVB for a pound to take over SVB UK's 6.70 billion deposits and 5.50 billion loans. The Federal Deposit Insurance Corporation said it had taken over Silicon Valley Bank through its newly created entity, Deposit Insurance National Bank of Santa Clara.

On March 13, 2023, the Federal Deposit Insurance Corporation created Silicon Valley Bridge Bank. Silicon Valley Bank reopened, but there were long queues at multiple locations.

On March 26, 2023, the Federal Deposit Insurance Corporation agreed to sell shares of Silicon Valley Bank to First Citizen Bank. Seventeen branches of Silicon Valley Bank will operate as banks of First Citizen Bank from the next day.

On April 28, 2023, the Federal Reserve released a report blaming the failure of Silicon Valley Bank on poor management, lax supervision by banking regulators, and lax supervision by its employees.