US seizes assets of Silicon Valley bank due to bankruptcy

NEW YORK (AP) — The United States seized the Silicon Valley bank’s assets on Friday after a run on its banks, the country’s largest bankruptcy since Washington Mutual amid a financial crisis more ten years old. .

Silicon Valley, the 16th largest bank in the United States, collapsed after depositors, mostly tech workers and venture capitalist-backed companies, rushed to withdraw their money this week as anxiety was spreading among bank financiers. It is the second largest bank failure in US history, behind Washington Mutual.

Silicon Valley was heavily exposed to the tech industry, and there is little chance of contagion in the banking sector, like the chaos of the months leading up to the Great Recession more than a decade ago. The biggest banks – those most likely to cause systemic economic problems – have healthy financial statements and abundant capital.

There has been unease in the banking sector all week, and the collapse of Silicon Valley banking sent shares of nearly every financial institution plummeting on Friday, stocks that had already fallen by double digits since Monday.