The management of the American investment bank Silicon Valley Bank (SVB) warned the United States Federal Reserve System (FRS) about the possibility of a $100 billion withdrawal of deposits in just one day. This statement was made by Michael Barr, the Vice Chairman of the Federal Reserve Board of Governors. The report stated that the credit structure, with the support of the regulator, could comply with depositor demands on the morning of March 10th.
However, SVB notified them that morning that a much more significant outflow of deposits was expected. Depositors were prepared to withdraw $100 billion that day, and the bank did not have sufficient funds to satisfy such requests. The previous day, clients of SVB withdrew a record-breaking $42 billion from their accounts, the highest one-day withdrawal in global banking history.
In the first half of March, the Federal Deposit Insurance Corporation (FDIC) announced the bankruptcy of Silicon Valley Bank, which ranked 16th in terms of assets in the United States. SVB became the largest bankrupt American bank in the last 15 years.
This week, the holding company First Citizen’s Bank & Trust Company acquired the bankrupt SVB.