Is Your Bank At Risk?

The Silicon Valley Bank bailout and its implications

On Friday, Silicon Valley Bank, a big player in the world of tech start-ups, suddenly imploded. Now it’s Sunday evening and everyone is speculating about possible implications that range from a tech start-up mass extinction to a global financial crisis (that’s the “Lehman moment” reference you’re seeing everywhere).

In recognition of the breadth of these implications, this post is divided into three parts: What happened; what it means for the global financial system; and what it means for your bank.

What Happened

Silicon Valley Bank (SVB) is (or was) the 19th largest bank in the US. It was intimately involved with the venture capitalists and tech start-ups that cluster around California’s Bay Area. For some reason it quadrupled in size between 2020 and 2022.