NEW YORK — The United States seized the assets of Silicon Valley bank on Friday after a run on its banks, the nation's biggest bankruptcy since Washington Mutual in the midst of the financial crisis more than a decade ago.
Silicon Valley, the 16th largest bank in the United States, collapsed after depositors, mostly tech workers and venture capital-backed companies, rushed to withdraw their money this week as anxiety spread across the states. bank financiers. It is the second largest bank failure in US history, behind Washington Mutual.
Silicon Valley was heavily exposed to the tech industry, and there is little chance of contagion in the banking sector similar to the chaos of the months leading up to the Great Recession more than a decade ago. The largest banks—the ones most likely to cause systemic economic trouble—have sound financial statements and abundant capital.
There has been malaise in the banking sector all week, and the collapse of the Silicon Valley bank sent shares of almost all financial institutions lower on Friday, stocks that had already fallen double digits since Monday.