How Silicon Valley Bank collapsed in 48 hours: a timeline of the fintech giant's fall

How Silicon Valley Bank collapsed in 48 hours: a timeline of the fintech giant's fall

Silicon Valley Bank (SVB), a leading tech-focused lender, shocked the financial world this week by announcing its sudden collapse, just two days after its CEO resigned. The once high-flying bank, which had grown rapidly by serving startups and venture capitalists, was now facing a liquidity crisis and regulatory scrutiny. As panic spread among its customers and investors, SVB struggled to find a buyer or a bailout, and eventually had to shut down its operations and file for bankruptcy. Here is a timeline of the key events leading to SVB's downfall.

Monday, March 6, 2023

SVB's CEO, Greg Becker, announces his resignation in a surprise move, citing personal reasons. Becker, who had led the bank for more than a decade and overseen its expansion to multiple countries and industries, had been widely respected for his vision and execution. His departure triggers speculation about the bank's future direction and leadership, as well as its exposure to potential risks and losses.

Tuesday, March 7, 2023

Rumors circulate that SVB is facing financial troubles, including a liquidity crunch and a surge in bad loans. The rumors are fueled by anonymous sources and social media posts, but are initially dismissed by SVB's spokespersons as unfounded and baseless. However, some of the bank's customers and investors start to withdraw their deposits or reduce their exposure, fearing a possible collapse or seizure by regulators.

Wednesday, March 8, 2023

SVB's stock plummets by more than 50% in early trading, triggering a circuit breaker and a temporary halt of trading. The sharp decline reflects a loss of confidence in the bank's prospects and disclosures, as well as a broader sell-off in the tech sector. SVB's board holds an emergency meeting to assess the situation and explore options, including a merger, a capital injection, or a sale of assets. The board also notifies the Federal Reserve and the Office of the Comptroller of the Currency (OCC), the primary regulators of the bank, about its liquidity challenges and seeks their guidance and support.

Thursday, March 9, 2023

SVB's liquidity position worsens as more depositors and creditors demand their funds back, draining the bank's cash reserves and triggering margin calls on its derivative positions. The bank's risk management systems and internal controls come under scrutiny, as some of the positions are found to be unhedged or overleveraged. The OCC issues a cease-and-desist order against SVB, prohibiting it from accepting new deposits or making new loans until it can demonstrate its ability to maintain adequate capital and liquidity levels. The order also requires the bank to submit a detailed plan to restore its operations and protect its customers and stakeholders.

Friday, March 10, 2023

SVB fails to find a buyer or a partner to rescue it, as potential suitors are deterred by its mounting liabilities and uncertainties. The bank's auditor, Deloitte, resigns citing "material weaknesses" in its financial reporting and control environment. SVB's board holds another meeting and decides to file for Chapter 11 bankruptcy protection, which allows it to restructure its debts and operations while continuing to operate under court supervision. The bankruptcy filing triggers a run on SVB's remaining deposits and assets, as customers and investors rush to recover their funds or claim their collateral. The bankruptcy court appoints a trustee to oversee the liquidation of SVB's assets and the distribution of its proceeds to creditors and shareholders.

The collapse of SVB sends shockwaves through the tech and finance industries, as it highlights the fragility and interconnectedness of the startup ecosystem and the risks