The Collapse of the Silicon Valley Bank

13 Mar, 2023
The Collapse of the Silicon Valley Bank

Business: Silicon Valley Bank, one of America's major banks, has been closed. In just two days, 100 billion dollars of the bank's rupees have been lost. This bank used to fund many startups. Obviously, now the concern of investors and startups has increased due to the sinking of this bank. In a petition to the US government, Y Combinator said that as many as 10,000 small businesses with accounts at Silicon Valley Bank could be affected. Along with this, up to 1 lakh jobs can also be lost.

This is a big bank crisis. Heavy unemployment is likely to increase. Some startups in India can also be affected by this. Due to the bank crisis, the monthly salary of the employees can also be reduced. There can be a crisis even over paying salaries. The petition, submitted to US Secretary of the Treasury Janet Yellen, states that a third of the startups in Y Combinator's community are operating under a sole account at the Silicon Valley bank.

Silicon Valley Bank (SVB) was a California-based commercial bank.

The Collapse of the Silicon Valley Bank

This banking crisis will affect more than 10,000 small businesses and startups. Over 3,500 co-founders, CEOs, startups, and small businesses have signed the petition. Indian companies PayO, SaveIN, and SalaryBook have also given support. Silicon Valley Bank has over 37,000 small businesses with over $250,000 in deposits. However, banks can no longer use this amount. It is under the control of the FDIC and will serve as receiver for years.

The banking industry is susceptible to a variety of risks and challenges. Risk includes economic downturns, changes in regulations, cybersecurity threats, and competition. Any of these factors could potentially impact the performance of any bank in the future.

Customers and investors should always research and monitor the financial health and performance of any bank in which they have an interest. Furthermore, before making any significant investment decisions, it is recommended that you seek the advice of a financial professional.
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