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

Beijing, March 14 (Xinhua) without social media, a run on Silicon Valley banks probably wouldn't have happened. There have been runs on the banking sector before, but the collapse of Silicon Valley banks is a new technology-driven phenomenon that has shocked the banking sector, regulators and most other experts.

Twitter accelerates the run on Silicon Valley banks and incites panic last week, anxiety in the tech world quickly escalated through social media, mainly on Twitter. Last Thursday, "SVB" was mentioned about 200,000 times on Twitter, and the founders and CEOs of several technology companies posted posts saying they would withdraw money from the bank. These outstanding figures in the field of technology are the old customers that Silicon Valley Bank has served for many years, but they are killing them.

"well, I've heard from dozens of founders how to deal with the Silicon Valley banking crisis, and it's going to be an all-out bank run." Howard Lerman, founder of tech startup Yext, wrote on Twitter on Thursday that Silicon Valley banks were trying to raise new capital.

Lehmann's tweet: "the reason for a bank run is that there is no advantage in keeping money in a bank in danger." Xavier Helgesen, founder of venture capital firm Enduring Ventures, wrote on the same day.

By Friday, depositors had tried to withdraw $42 billion from Silicon Valley banks. The bank was shut down by regulators and taken over by the Federal Deposit Insurance Corporation.

Never before has a bank failed so quickly, says Tom Vartanian, author of 200 years of American Financial panic and general counsel of the Federal Home loan Banking Commission during the savings and loan crisis in the late 1980s.

"the crisis and the rapid development of social media tell us that technology is phasing out the existing regulatory structure established in the 1930s," he said. "in a technologically skilled environment, the whole system needs to be viewed from a different perspective."

During the savings and loan crisis, "loss of confidence" led to "panic" among depositors, but it spread for weeks, not hours. Mr. Valtanian recalled that this helped regulators and government workers quell panic and actively work to stop runs.

"when we closed savings and loan banks to prevent runs, we used to ask banks to pile cash on the counter window so that people could see it to allay people's psychological concerns. one common occurrence is that when people see the cash on the counter, they still line up to withdraw the money, but they will put the money back immediately. The psychological factors of getting the money calmed them down." Valtanian said.

The news on Twitter caused panic, but he added that such an expedient no longer seemed feasible because "now the spread of information is so real-time that false information can be spread instantly".

Ironically, the investors and founders who are most exposed to Silicon Valley banks are those who quickly incited panic and eventually led to the collapse of Silicon Valley banks. "our industry shoots itself in the foot," says venture capitalist Mark Suster. He called for calm last Thursday, but basically no one paid any attention to it.

Delete incitement tweets Chen Siji (Siqui Chen), founder and CEO of financial software startup Runway, deleted some of his tweets about Silicon Valley banks and admitted on Monday that "inciting a bank run is bad for everyone. I don't want to be a pusher."

But it's a little late.

Grant Brook (Grant Brooke) is another founder who deleted tweets about Silicon Valley banks last Thursday, but he didn't explain why. One of his deleted tweets read: "at the moment, Silicon Valley Bank has a few hours to arrange acquisitions. As a founder, you have a responsibility to limit exposure for your employees and investors." "as one of the few founders who may have experienced a modern bank run, withdraw your money now," he wrote in another deleted tweet. "they have to say everything's fine. if you don't have another bank account, deposit the money in your investor's non-Silicon Valley bank account."

Some tech bigwigs who have accounts with Silicon Valley banks have even deleted tweets that they support the bank. "leave our $13 million at Silicon Valley Bank," wrote Jason Lemkin, a prominent venture capitalist and consultant, on Twitter on Thursday. That's it. As a result, the tweet was deleted the next day, saying in response to CNBC: "I was wrong."

Meanwhile, tech founders and later investors Jason Calcanis and David Sacks have been talking about Silicon Valley banks on Twitter since last Thursday. By Friday, Mr. Karkanis called the situation of Silicon Valley banks a "level one alert" that needed a bailout.

"next Monday, 100000 Americans will line up at their regional banks to withdraw money, but most will not get it." Karkanis tweeted that he called March 13 "Monday, Bloody Monday."

Karkanis said most people didn't get paid on Sunday, and Vivek Ramaswamy, an entrepreneur and conservative activist, pointed out that VCs and some founders seemed to be "sparing no effort to promote the idea that there will be a bank run on Monday." As a result, he drew an angry response from Saks.

"the fake populist psychopath also opposes responsible measures to prevent a banking crisis, while announcing in advance that he plans to blame those of us who are trying to avoid a crisis for the ensuing chaos. Keep this guy as far away from the Oval Office as possible." Sachs wrote.

The tweet that takes social media saxophone seriously has also been deleted. However, efforts to rewrite the panic of the past four days continue.

Chen Siji deleted previous tweets about Silicon Valley banks and said again on Twitter on Monday that Karkanis and Sachs' warning was actually to "prevent a massive bank run, and they knew they would be blamed for it."

Matt Ocko, co-founder of Silicon Valley venture capital firm CVC, agrees that without creating "propaganda and urgency" on or through social media, "those in power are likely to have been sleeping and screwing up the country."

In the future, it is unclear how another bank will avoid suffering the same fate as Silicon Valley banks. One founder suggested that banks take social media more seriously. "the same type of strategy that can manipulate elections can also be used to weaken banks." He said.

But for the failed Silicon Valley bank, its Twitter account has been completely deleted.

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