What Happened to Silicon Valley Bank and Is It Contagious?
On March 10, 2023, Silicon Valley Bank collapsed. Providing capital to tech startups, SVB had a portfolio of loans at low rates. But as the Fed kept raising its rates, SVB's borrowing costs kept rising. Meanwhile, venture capital customers began pulling their money out. The bank attempted to raise fresh capital, but its efforts failed. SVB was shut down by regulators and turned over to the FDIC. People are now wondering: Is what happened to SVB contagious? Will other banks meet the same fate?