On March 10, 2023, the Silicon Valley Banks collapsed. The collapse started with Silvergate Capital cryptocurrency-bank liquidating all of its assets. SVB then had to sell a chunk of its debt securities. SVB then announced it was going to have to shore up it’s balance sheet and raise $2 billion in capital. 

Unfortunately, they were forced to sell a bond portfolio at a $1.8 billion loss which weakened it greatly. According to nytimes.com, Greg Becker, the Chief Executive at SVB sent out a letter to customers saying that the bank enjoyed the financial position to weather sustained market pressures and noted that the money customers deposited in the bank had come in lower than expected in February. This caused Moody’s (a credit ratings firm) to make the bank’s bond rating negative instead of stable. 

Bill Ackman, a billionaire investor, said the SVB could fail and require a bailout. CEO of the payroll service provider “Rippling”, Parker Conrad then tweeted that they notified some customers that their payment would be delayed due to the bank’s “unexpected solvency challenges.” The company has a plan to switch from SVB to JPMorgan Chase while being on time not to avoid stalled payments. President Joe Biden announced last week that the federal government would designate SVB and Signature Bank as risks to the financial system and would guarantee all of the deposits. In doing so, Biden paid the $250,000 cap on deposit insurance.

 In a letter written to the chairs of the Securities and Exchange Commision, the F.D.I.C and the Federal representative Maxine Waters, asked the regulators to use the maximum extent of their current powers to hold both banks senior executives and board directors accountable.