SVB Financial Group Sees Stock Plunge Amid Banking Crisis Fears

SVB Financial Group, the parent company of Silicon Valley Bank, saw its stock plunge 60% on Thursday after revealing a $1.8 billion loss from selling its investments, and announcing it would raise $2.25 billion in capital.[0] This has sparked fears of a wider banking crisis, and the 10-year Treasury yield has dropped 5 basis points to 3.92%.[1]

Silicon Valley Bank, one of America’s largest banks with more than $200 billion in deposits, was shuttered by US regulators on Friday and put under control of the US Federal Deposit Insurance Corporation.[0] This came after deposit outflows and a failed capital raise called into question the future of the tech-focused lender.[2]

Billionaire hedge fund manager Bill Ackman floated the idea of a government bailout for the bank in a tweet on Thursday, saying, “If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.”[3]

On Friday, Janet Yellen, the Secretary of the Treasury, admitted to the difficulties in the industry, stating that there are “a few” banks which the department is carefully monitoring.[4]

Silicon Valley Bank is deeply embedded in the US startup scene, as the only publicly traded bank focused on Silicon Valley and tech startups, according to its website.[5] It does business with nearly half of all US venture capital-backed startups, and 44% of US venture-backed tech and health-care companies that went public last year.[5]

At the end of 2022, Chair Martin Gruenberg of the Federal Deposit Insurance Corporation discussed the emerging interest rate risks in the industry in a speech on March 6. It was stated that the unrealized losses on available-for-sale and held-to-maturity securities across all U.S. banks totaled $620 billion.[6]

SVB Financial Group (SVB) is the holding company for all business units and groups of Silicon Valley Bank, and provides commercial banking, venture investing, wealth planning and investment banking services.[7] The Federal Reserve has been increasing rates quickly, and Chair Jerome Powell recently cautioned that the central bank might have to quicken the rate hikes to slow down the economy.[8] Banks face a straightforward issue: when interest rates rise, the worth of their existing bonds decreases.[9]

The fear is that the failure of Silicon Valley Bank could destroy a long-term driver of the economy as venture capital-backed companies rely on SVB for loans and holding their operating cash.[10]

0. “Why the SVB-Triggered Selloff Is a Buying Opportunity in Big Bank Stocks” Barron's, 10 Mar. 2023,

1. “Stocks sell-off accelerates, Dow tumbles 400 points as Silicon Valley Bank failure spooks investors: Live updates” CNBC, 10 Mar. 2023,

2. “Silicon Valley Bank shut down by US banking regulators” Ars Technica, 10 Mar. 2023,

3. “Silicon Valley Bank shut down by regulators” Fox Business, 10 Mar. 2023,

4. “SVB's meltdown has macro ripples beyond Silicon Valley” Axios, 10 Mar. 2023,

5. “What Triggers a Run on Silicon Valley Bank? SVB Collapse Explained” Bloomberg, 10 Mar. 2023,

6. “Why Silicon Valley Bank's crisis is rattling America's biggest banks” Yahoo News, 10 Mar. 2023,

7. “Venture capitalists urge startups to withdraw funds from crisis-laden Silicon Valley Bank” CNBC, 10 Mar. 2023,

8. “Yellen says Treasury Department ‘carefully' watching crisis at ‘a few banks'” Yahoo News, 10 Mar. 2023,

9. “Regulators close Silicon Valley Bank after bank fails to raise new capital” Yahoo Money, 10 Mar. 2023,

10. “Silicon Valley Bank collapse has echoes of 2008. Here's why things are different this time” CNN, 10 Mar. 2023,

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