Silicon Valley Bank collapsed on Friday, March 10, 2023, as it announced that it would be shutting down its operations. Shocking the startup community, Silicon Valley Bank was a lender to some big and small companies.
However, the California Department of Financial Protection and Innovation shut down Silicon Valley Bank after they tried to convince people not to take out their money as it was falling short of cash.
As a large number of depositors withdrew their money all at once, the bank was hit hard, as it was already trying to raise $2.25 billion to compensate for some previous losses. According to reports, the SVB fiasco has become a US bank's biggest failure since 2008.
Many users on social media have been posting humorous memes about the whole incident to lighten the situation, while those who have lost millions are in a state of profound shock and despair. One social media user hilariously shared a meme and said:
“Unstable coins.”
The bank will reopen its offices on March 13 to allow insured depositors to access their insured accounts, even though around $175 billion of the bank's total deposits are uninsured, accounting for nearly 89% of the total.
Social media users share Silicon Valley Bank memes after it collapsed on Friday
The Silicon Valley Bank Crisis happened after the stocks dropped aggressively, which further led to a loss of over $80 billion. This then panicked the depositors and clients, who then reached the branches to withdraw their money. However, the entire fiasco has now led social media to react, and netizens are sharing some hilarious memes about the situation. Here is how the world of the internet is reacting:
Silicon Valley Bank collapse becomes the biggest US bank to fail since 2008: What could happen next?
As the SVB said on Wednesday, March 8, 2023, that it had sold a big chunk of its securities to reset its earnings and seeking to raise about $2.23 billion, the announcement soon panicked the stock market, which turned out to be a total shock for everyone.
After the bank shocked its clients and depositors, the stock price fell, making it harder for Silicon Valley to raise now the capital it wanted. Also, this caused consumers to withdraw billions in deposits, which quickly ran out of money for the bank.
Since this massive incident, the world has been wondering what will happen next. Besides the offices opening on March 13 for insured depositors to access their deposits, the US regulator has claimed that the uninsured depositors will be provided with an advance dividend within the coming few days.
Furthermore, as reported by Reuters, the FDIC is also looking for more banks over the weekend that are willing to merge with SVB to safeguard unsecured deposits. With this fiasco, Silicon Valley Bank has become the second-biggest US commercial bank to fail since Washington Mutual, which collapsed in 2008, leading to a financial crisis.