Governor Gavin Newsom justified the need for presidential intervention by saying that stabilize the situation, protecting not only jobs and people’s livelihoods, but also California’s entire innovation ecosystem. The clients of the financial institution that collapsed in two days were primarily businesses, mainly technology companies, venture capital investment companies, premium wineries, and wealthy individuals from the world of the technology industry.
The collapse of Silicon Valley Bank is being cited by experts as the second largest financial institution collapse in US history, the largest since 2008.
Bankruptcy also affects overseas businesses. SVB’s London bank, which was associated with a significant number of startup companies, has ceased operations. In addition to London, the bank maintained offices in India, China, Germany, Sweden and Denmark, among others.
Contributing to the collapse was the difficulty of many companies in the technology industry. THE he was forced to ensure the operation of the financial institution from the deposits placed with him, following which the financial authorities intervened on Friday and placed it under supervision. The American federal deposit insurance compensates the loss for American customers with deposits below 250,000 dollars, and tries to find a buyer for the bank so that larger deposits are not lost.
The Silicon Valley bank was founded in 1983 with the specific aim of recruiting clients from companies in which venture capital firms invest. Such enterprises operate largely in the technology industry. The bank was connected to a significant part of Silicon Valley businesses.
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