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

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(Silicon Valley Bank in the cold wind and cold rain)

(no one is waiting in line at the door, but there are media reports.)

(there was no queue and the staff declined to interview) the spring in California this year was particularly bleak, with a cold breeze and drizzle in mid-March. It has just sent off a cold wave, and today it is cold and windy.

Sina Technology arrived at the Silicon Valley Bank's branch in Santa Clara early in the morning. The bank is open for business, and there is a security guard at the door. when you see someone approaching, you will open the door to welcome. But after Sina Technology indicated its intention, staff declined to comment.

No one lined up outside the bank, but three media set up cameras to report at the scene in spite of the rain. After waiting for a while, the media withdrew quickly. It was windy and rainy, and even with an umbrella, the trouser legs got wet for a while. No one wants to stand outdoors in this weather, let alone there are no news spots to report.

As a professional bank serving startups, the Silicon Valley bank is located in the northern part of Santa Clara, where South Bay startups are densest, and the surrounding office buildings are almost full of startups. The parks of technology giants such as Intel, Nvidia, Cisco and Samsung USA are just a few minutes' drive.

Yesterday, the Silicon Valley Bank showed up a team of more than 20 people at its Menlo Park office in Silicon Valley. According to Sina Science and Technology, this is mainly because the website of Silicon Valley Bank has not returned to normal yesterday morning, and some enterprises who are in urgent need of money choose to come to offline outlets to withdraw money as soon as possible. American companies usually pay their salaries every semimonthly, so they need to pay their salaries this week.

It seems that Silicon Valley banks have returned to the old scene after the "earthquake" of the past week. Despite the signs of Silicon Valley Bank and the same staff serving customers, the bank has undergone a high-level purge and has become a new company taken over by federal regulators.

On Sunday night, the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation (FDCI) issued a joint statement approving the restructuring of Silicon Valley banks and promising to guarantee all deposits of Silicon Valley banks. All depositors will be able to withdraw all their funds from Monday. However, the US government only guarantees the deposits of Silicon Valley bank depositors and does not bear the losses of shareholders and creditors.

The news that the federal government guarantees the safety of all deposits has put the US technology industry at ease for four days: their money has finally been saved. After four days of panic and anxiety, many companies can pay wages and run their businesses this week.

Tim Mayopoulos, the new CEO of Silicon Valley Bank, sent a letter to corporate clients yesterday saying that the bank had returned to normal operation. All deposits and assets of Silicon Valley banks have been transferred to transitional institutions run by federal regulators, and all deposits and new deposits of customers will be fully federally guaranteed, he said.

A founder of a biotech startup told Sina Technology that this week they will launch new products and pay their employees, which is the time when they need the money most. After hearing the news of the collapse of the Silicon Valley bank last Thursday, she was too anxious to sleep for four days because the company's millions of dollars in deposits were in the Silicon Valley bank. She spent the weekend trying to borrow money all over the place. I was relieved to see the news on Sunday night.

Perhaps, before this collapse, not many people outside the tech community will know about Silicon Valley banks. As a regional bank with $200 billion in assets, Silicon Valley Bank ranks only 16th in US banking assets, a far cry from JPMorgan Chase, Bank of America and other giants.

But in Silicon Valley, the bank is the backbone of the tech world. Silicon Valley Bank, which has a history of 40 years, is the first bank in the United States to provide financial services specifically to the venture capital circle. Almost all of their 65000 customers are technology companies. Half of American venture capital-backed startups have accounts with Silicon Valley banks. Because of the VIE structure, many Chinese technology companies are also customers of Silicon Valley banks.

Because of this, the news of the collapse of Silicon Valley banks sent the whole Silicon Valley into a panic. Because the vast majority of deposits are corporate deposits, $155 billion of Silicon Valley banks'$175 billion deposits are not covered by FDIC's $250000 deposit insurance.

General Catalyst, Sequoia Capital and other 325 venture capital firms and more than 600 technology entrepreneurs signed a statement calling on the federal government to take regulatory measures to prevent the Silicon Valley crisis. They said, "if Silicon Valley Bank is acquired and restructured, we will strongly support and encourage our portfolio companies to restore their business relationship with Silicon Valley Bank."

After the collapse of Silicon Valley Bank, many regulatory officials, including President Joe Biden, California Governor Newsom, Congress, Treasury Department, Federal Reserve and FDIC, finally announced the decision to guarantee all deposits on Sunday night, which reassured the Silicon Valley technology industry.

After the federal government took over Silicon Valley Bank, the Justice Department and the Securities and Exchange Commission (SEC) also began to investigate the bank's executives. Just before the collapse of Silicon Valley banks, executives were selling stocks for emergency cash, and even planned to hand out last year's year-end bonuses. Their actions have also led to class-action lawsuits from Silicon Valley bank shareholders.

On Thursday, Silicon Valley Bank suddenly announced a discounted sale of $22 billion of securities (a loss of $1.8 billion, CTOnews.com notes: about 12.348 billion yuan), issued $15 billion of convertible bonds, and raised $2.25 billion in private equity. At the same time, three financing measures have raised concerns that Silicon Valley banks may have suffered a serious cash crisis. The share price of Silicon Valley Bank plummeted 40% on the same day.

What is more frightening than the collapse of share prices is the storm of runs. Throughout the day last Thursday, technology companies were frantically withdrawing their deposits in Silicon Valley banks. The requirements for withdrawals on the same day were as high as 42 billion US dollars, equivalent to 1/4 of the total bank deposits.

Last Thursday night, the cash balance of Silicon Valley Bank had become minus $1 billion, unable to meet normal settlement requirements. And their financing measures simply cannot be put in place in time to plug the funding gap. This means that the 40-year-old Silicon Valley bank has actually failed. This is the largest bank failure in the United States since the collapse of Washinton Mutual in 2008. On Friday morning, federal banking regulators urgently took over Silicon Valley Bank.

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