This marks the largest banking collapse event in the United States since the 2008 financial crisis, potentially triggering a domino effect in financial markets.
Silicon Valley Bank collapsed within 48 hours due to insolvency and was taken over by the Federal Deposit Insurance Corporation (FDIC) on March 10.
The US Treasury Department, the Federal Reserve, and the FDIC issued a joint statement on the evening of the 12th, taking decisive action to bolster public confidence in the banking system and guaranteeing SVB depositors the ability to withdraw all funds on Monday, March 13.
On March 12, the US Treasury Department closed “Signature Bank” headquartered in New York State, citing systemic risks. The bank was a major source of financing for cryptocurrency companies.
President Biden addressed the nation, promising to do “everything possible” to protect the banking system. However, investors fear that other banks may still be affected, causing a sharp decline in global stock prices.
The crisis has rattled global financial markets, with markets in Canada, the UK, and others affected. Stock markets in Frankfurt, Paris, and Milan saw significant declines.
Earlier on Monday, March 13, shares of Spanish Santander Bank and German Commerzbank fell by more than 10%.
George Godber, fund manager at Polar Capital, said the market decline was due to “concerns that there may be other events happening.” He said, “The imminent crisis may have been averted, but it reminds people that there is a group of companies whose business models will struggle in a high-interest-rate environment.” However, he said the direct impact of the event on the UK economy and market is limited.
BBC Chinese summarized the background of this crisis and its global impact.
