FAQ and investment implications
Silicon Valley Bank, a midsize bank with a heavy presence in Silicon Valley, announced that it would need to sell a large portfolio of US Treasuries at a significant loss seemingly to cover deposit outflows. Pressure on the technology sector was driving reduced deposit balances among the bank’s clients, while higher US bond yields had contributed to mark-to-market losses on its asset portfolios.
Efforts over the weekend to find a buyer for SVB were unsuccessful, and late on Sunday the US Treasury, Federal Deposit Insurance Corporation, and Federal Reserve announced they would guarantee all deposits at the bank and ensure access to all funds this week. They also announced they would take control of similarly troubled New York-based lender Signature Bank and guarantee all of those deposits
