Shulou(Shulou.com)11/24 Report--

Thank CTOnews.com netizens Rimi Ishihara for happy, orchid is me, Microsoft to fear, _ d _, grass Luo Yuzi, soft media user 1815736, recommendation, Yuzaka, soft media user 1747544, OC_Formula, Snailwang clue delivery! March 12 news, according to foreign media reports, on March 10, local time, the Federal Deposit Insurance Corporation (FDIC) issued a statement that Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation (DFPI) and designated FDIC as bankruptcy administrator.

Silicon Valley Bank is the 16th largest bank in the United States, focusing on PE / VC and technology corporate financing, mainly for technology startups backed by venture capital institutions. Its customers are highly concentrated in high-tech start-ups, and nearly half of all tech startups in the United States have financing relationships with Silicon Valley banks. It is reported that Silicon Valley banks make profits mainly by providing short-term bridge loans to VC / PE, which accounts for about 56 per cent of the business.

People in Silicon Valley and financial circles in the United States have called on the US federal government to push another bank to assume responsibility for its assets and debts after the collapse of Silicon Valley banks. According to the statement, FDIC will provide $250000 insurance for each Silicon Valley bank depositor, but most Silicon Valley bank depositors have more than that amount, including a large number of start-ups. Analysts believe that the bankruptcy of Silicon Valley banks may lead to widespread failures and layoffs in the technology industry.

With the bankruptcy of Silicon Valley Bank, many start-ups in China are also worried about being affected and affected. On the 11th, Pudong Development Silicon Valley Bank, a joint venture bank of Silicon Valley Bank in China, issued an emergency statement saying that the company had an independent balance sheet.

A bank run withdrew $42 billion Silicon Valley Bank went bankrupt overnight. The collapse of Silicon Valley Bank was very sudden. Affected by its business, Silicon Valley banks do not have retail business and do not accept personal savings deposits, and their foreign loans are mainly financed by deposits from venture capital institutions and start-ups that have access to financing.

Before March 9, US time, Silicon Valley Bank issued an announcement announcing that it would sell all of its $21 billion of marketable securities, resulting in a loss of $1.8 billion and seeking to raise $2.25 billion through the sale of shares.

After the Silicon Valley Bank announced the news, there were a lot of questions about the ability of Silicon Valley banks to pay, and some fast-moving venture capital funds began to withdraw funds from Silicon Valley banks. Shares of silicon valley banks closed down more than 60% on Thursday.

Silicon Valley Bank shares fell another 68% in pre-market trading on March 10 as investors panicked. Silicon Valley Bank immediately suspended trading in its shares, and management tried to pay for deposit withdrawals through emergency financing and selling shares in exchange for liquidity, but all efforts failed. Silicon Valley Bank was declared bankrupt on the 10th and FDIC took over.

According to foreign media reports, a document submitted by California regulators shows that as of March 9, Silicon Valley bank customers have withdrawn a total of $42 billion in deposits, and Silicon Valley banks have a cash balance of negative $958 million.

The sudden bankruptcy of Silicon Valley Bank has caused heavy losses in the venture capital circle. According to media reports, many venture capital funds have not yet come and successfully transferred the money out. Once the start-up company does not withdraw the money in time, there may be problems with the payment of wages.

According to a notice issued by FDIC, bankruptcy administrator of Silicon Valley Bank, all insured depositors will fully receive their insured deposits by Monday morning, March 13, 2023. FDIC will make advance payments to uninsured depositors within the next week. Uninsured depositors will receive a bankruptcy administration certificate for the remaining amount of the uninsured fund. As FDIC sells assets of Silicon Valley banks, dividends may be paid to uninsured depositors in the future.

In addition, Silicon Valley Bank has 17 branches in California and Massachusetts. The headquarters and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. As of December 31, 2022, Silicon Valley Bank had total assets of approximately $209 billion and total deposits of about $175.4 billion. At the time of settlement, the amount of deposits exceeding the insurance limit has not yet been determined. Once FDIC gets more information from banks and customers, it will determine the amount of uninsured deposits.

Pudong Development Silicon Valley Bank issued a statement that the sudden bankruptcy of Silicon Valley Bank of the United States has made domestic, especially many US dollar VC / PE, start-ups also worried about being affected and affected.

Pudong Development Silicon Valley Bank, a joint venture bank between Silicon Valley Bank of the United States and Shanghai Pudong Development Bank, issued an emergency announcement on the 11th, saying: Pudong Development Silicon Valley Bank was established in August 2012 and is a legal person bank registered in China. Pudong Development Silicon Valley Bank has a standardized corporate governance structure and an independent balance sheet. As China's first science and technology bank, Pudong Development Silicon Valley is committed to serving Chinese science and technology start-ups and operating steadily in accordance with Chinese laws and regulations.

Information shows that Pudong Development Silicon Valley Bank is 50% owned by Pudong Development Bank and Silicon Valley Bank.

According to the 2021 annual report released by Pudong Development Silicon Valley Bank, about 98 per cent of the companies it serves are local science and technology start-ups, serving more than 3000 corporate customers as of the second quarter of 2021.

At present, it is not clear about the impact of the bankruptcy of Silicon Valley Bank on related domestic business.

Many analysts believe that the bankruptcy of Silicon Valley banks is caused by the term mismatch (asset maturity mismatch and liability maturity mismatch) caused by "borrowing short to buy long" (that is, short-term sources of funds and long-term use of funds) under the high interest rate environment brought about by rapid and substantial interest rate increases by the Federal Reserve.

For the sudden bankruptcy of Silicon Valley Bank of America, Internet investor Zhuang Minghao wrote on his Weibo: "if the outbreak of Internet + 's VC has contributed to Silicon Valley in the past 20 years, then this effect has also created SVB, a special 'bank'. Then today, the whole narrative of Internet + 's VC is gone, and so is the so-called Internet + Silicon Valley wealth-making myth."

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.