The collapse of Silicon Valley Bank (SVB) on March 10, 2023, was a shock to the financial sector and the tech industry. As one of America's 20 largest commercial banks, SVB had a dominant position in financing technology startups and venture capital firms. However, the bank's downfall was caused by a combination of factors, including fraud allegations, regulatory scrutiny, liquidity problems, and a run on deposits.
SVB's collapse was the second-largest bank failure in US history, and its impact is still unfolding. Many customers, investors, and partners of SVB have lost money or access to credit. Some startups have gone bankrupt or struggled to find alternative funding sources. The FDIC has taken over SVB and is trying to sell its assets and repay its creditors.
However, the collapse of SVB could also trigger a sea change in banking, as it exposes the risks and vulnerabilities of relying on a single institution for financing innovation. SVB was known for its specialization...