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Silicon Valley Bank and Signature Bank Collapse: How It Happened, What It Means, and Why (Most of Us) Shouldn’t Worry at the Moment

On March 14, 2023 by Schnader in Publications

Silicon Valley Bank (SVB) was closed, and the FDIC seized its assets and created the Deposit Insurance National Bank of Santa Clara (DINB) to protect SVB depositors.

Signature Bank was also closed and the FDIC transferred its assets and deposits to Signature Bridge Bank, N.A (SBB).

Most analysts blame the collapse on the uniquely vulnerable nature of regional, niche banks – meaning the SVB collapse may be contagious for similar banks (like Signature Bank), but most other banks should remain solvent. SVB’s collapse appears to have led to the failure and closing of Signature Bank, and other banks’ shares had sharply dropped in pre-market trading on Monday, March 13, 2023. The Federal Reserve has created a Bank Term Funding Program to provide loans to shore up the banking system in return for certain collateral like Treasuries.

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