Just before being shut down by regulators on Friday, March 10, Silicon Valley Bank had posted a senior manager, financial crimes job listing.

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The job description stated that the employee would have to act as a subject matter expert when it came to interpreting regulatory change, which was related to the different due diligence processes to include enhanced due diligence and customer due diligence processes.

"This position within Client

California-based Silicon Valley Bank, the 16th largest bank in the US, was shut down on March 10 by the California Department of Financial Protection and Innovation which later appointed the FDIC as its receiver.

SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis.

Also Read: SVB collapse and the India exposure

The bank failed after clients — many of them venture capital firms and VC-backed companies that the bank had cultivated over time — began pulling out their deposits, creating a run on the bank (among the biggest US bank runs in more than a decade). Bank runs occur when customers or investors gripped by panic start withdrawing their money, causing the bank to be incapable of paying its obligations as they come due.

The roots of SVB’s collapse stem from dislocations spurred by higher rates. As startup clients withdrew deposits to keep their companies afloat in a chilly environment for IPOs and private fundraising, SVB found itself short on capital. It had been forced to sell all of its available-for-sale bonds at a $1.8 billion loss, the bank said late Wednesday.

The United States regulators on Sunday night cleared a plan for the Silicon Valley Bank (SVB) to protect depositors and assured that no losses would be borne by the taxpayers. The Joe Biden administration announced that depositors of the SVB will have access to their money from Monday.

Also Read: SVB collapse: Shareholders sue Silicon Valley Bank parent, CEO and CFO for fraud

First Published:Mar 14, 2023 4:56 PM IST