Think of the Kevin Bacon gif from Animal House – you know, where the panicked crowd is rushing past him after the parade, as he tries to keep everyone calm. A little Zen breathing might be in order, considering we have the brainless trust that’s in charge.
The sudden collapse of a little-known, California-based tech lender fueled market chaos on Friday and sparked fears of a wider contagion that some experts worry could upend the US banking sector.
Silicon Valley Bank — a 40-year-old lender to startups and venture capitalists — became the second-biggest bank casualty in US history as it was abruptly shut down on Friday by the California Department of Financial Protection and Innovation, which placed the bank’s remaining assets under the Federal Deposit Insurance Corp.’s control.
SVB’s finances went south at warp speed after it disclosed a $1.8 billion loss on its bondholdings this week. CEO Greg Becker urged investors to “stay calm” and not “panic” on a Thursday conference call — but jittery clients were already scrambling to pull large balances in excess of the FDIC’s insured caps.
