SVB Financial Group significant event collapse of Silicon Valley Bank
Collapse of Silicon Valley Bank
In March 2023, Silicon Valley Bank experienced a bank run and collapsed. Then Federal Reserve Board Vice Chair for Supervision Michael Barr reported its customers tried to withdraw 81% of its deposits ($142 billion of a $175 billion total, as of the end of 2022) over two days. The failure of Silicon Valley Bank was the largest of any bank since the 2007–2008 financial crisis by assets, and the second-largest in U.S. history behind that of Washington Mutual. On March 10, 2023, the California Department of Financial Protection and Innovation closed SVB, Santa Clara, and appointed the FDIC as receiver, which transferred all the bank's assets to a newly-established bridge bank. The holding company was not included in the bank closing or resulting receivership. It is no longer affiliated with either Silicon Valley Bank or SVB Private. When the FDIC took over Silicon Valley Bank on March 10, it seized the Santa Clara headquarters shared by the bank and SVB Financial Group; as a result, the holding company moved its headquarters to its offices in New York City.On March 13, 2023, SVB Financial Group began exploring a potential sale of the bank's sister companies SVB Capital and SVB Securities. The latter's founder, Jeffrey Leerink, has expressed interest in buying back the firm. However, the finances of these companies are deeply intertwined with Silicon Valley Bank, which could complicate any sale. The company filed Chapter 11 bankruptcy on March 17, one week after the bank's failure. A group including Centerbridge Partners, Davidson Kempner Capital Management, and PIMCO reportedly bought a stake in the company in anticipation of the bankruptcy.On June 18, 2023, SVB Financial Group announced it had agreed to sell SVB Securities in a management buyout, led by Leerink, with funds from the Baupost Group. After the acquisition, SVB Securities would be renamed to Leerink Partners. MoffettNathanson LLC, the company's research business, was not included in the sale.