Silicon Valley, the nation's 16th largest bank, was heavily exposed to the tech industry and there's little chance of contagion in the banking sector.
The U.S rushed to seize the assets of Silicon Valley Bank on Friday after a run on the bank, the largest failure of a financial institution since Washington Mutual during the height of the financial crisis more than a decade ago.
Silicon Valley was heavily exposed to tech industry and there is little chance of contagion in the banking sector similar to the chaos in the months leading up to the Great Recession more than a decade ago. Major banks today have sufficient capital to avoid a similar situation, though the sector has been under pressure all week.
Shortly before noon eastern time, the Federal Deposit Insurance Corporation moved to shutter the bank. Notably, the FDIC did not wait until the close of business to seize the bank, as is typical in an orderly wind down of a financial institution. The FDIC could not immediately find a buyer for the bank's assets, signaling how fast depositors had cashed out. The bank's deposits will now be locked up in receivership.
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