Bank Failure in a Time of Tight Money
A fast response is needed so that even the slightest shock can be immediately mitigated so that it does not spread and has the potential to cause systemic impacts.
A Prasetyantoko
Silicon Valley Bank (SVB), closed by the California Department of Financial Protection and Innovation, in the United States, is the largest bank to fall since the 2008 global financial crisis. With total assets of US$209 billion, SVB was the backbone of technology-based start-up funding. .
Signals of panic spread to global financial markets, marked by a fall in stock prices in the banking sector and the technology-based industrial sector. The closure of SVB is one of the signals of a dimming of financial innovation. This began with the collapse of crypto asset prices (crypto winter), a wave of layoffs in the start-up sector, and corrections to the valuations of technology-based companies.