SVB Financial Group has petitioned the United States Bankruptcy Protection Court for the Southern District of New York for a court-supervised Chapter 11 reorganisation. The business looks to sell its assets.
The funds and general partner companies of SVB Securities and SVB Capital were not included in the Chapter 11 petition, according to a statement from the business. The Silicon Valley Bank was taken over by the Federal Deposit Insurance Corporation (FDIC) on Friday, March 10, 2023. Silicon Valley Bank was one of the most well-known lenders to technology start-ups worldwide and the 16th largest bank in the US before the purchase.
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The bank’s bankruptcy ranks as the second-largest in American history and the biggest since the global financial crisis of 2008. Due to the panic that resulted from its failure, the world’s stock markets fell. In premarket trading, shares of major American banks decreased by more than 1%. Regional banks saw losses of between 10% and 20%, including PacWest Bancorp and First Republic Bank. The digital lender was compelled by an increase in yields to sell a portfolio of treasuries and mortgage-backed securities to Goldman Sachs at a $1.8 billion loss. It attempted to raise $2.25 billion in common equity and preferred convertible stock to close the gap, but worried customers withdrew deposits from the bank, causing $42 billion in withdrawals in a single day. The business reported having around $2.2 billion in liquid assets on Friday. By the end of the previous year, it had $209 billion in assets.
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