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    SVB Financial Plunges to New 52-Week Low After Federal Reserve Rate Hikes


    On Thursday, the Silicon Valley Bank (SVB) parent company, SVB Financial, suffered a drastic plunge in its stock price, dropping by an astounding 60%.[0] The stock continued to sink overnight, with premarket trading on Friday bringing it to a new 52-week low of $106.04.[1] This led to the bank’s closure on Friday, with the US Federal Deposit Insurance Corporation (FDIC) acting as a receiver.[2]

    SVB Financial had previously announced a $1.75 billion share sale and a cut in guidance.[3] Deposits had been declining due to the funding drought that many startups have been facing.[3] There are also huge concerns about the bank’s loans to the tech industry.[3]

    The Federal Reserve’s aggressive rate hikes have been a major factor in the bank’s collapse. The 10-year Treasury yield dropped 10 basis points to 3.82%, while the 2-year yield sunk 11 basis points to 4.79%.[4] SVB had invested much of its money in Treasury bonds with long maturities, and these bonds have seen their prices fall as a result of the rate hikes.[5]

    The bank’s fire sale of its bond portfolio resulted in a $1.8 billion loss and the necessity of a $2.25 billion capital raise.[1] CEO Greg Becker tried to calm tech investors and startups during a Thursday Zoom call, but rumors and concerns about the bank’s financial position had already been spreading for months.[6]

    Billionaire hedge fund manager Bill Ackman compared SVB to Bear Stearns, the first lender to collapse at the start of the 2007-2008 global financial crisis, tweeting that “the failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash.”[7] He suggested that if private capital can’t provide a solution, a “highly dilutive” government bailout should be considered.[8]

    Ex-Treasury Secretary Larry Summers said SVB’s implosion shouldn’t pose a systemic risk to the US financial system as long as depositors are made whole.[9] Secretary of the Treasury Janet Yellen told legislators on Capitol Hill Friday that the department was aware of recent developments and was monitoring the situation.[10]

    0. “Bank Stock Selloff Triggered by SVB Financial Liquidity Crunch” Morningstar, 10 Mar. 2023,

    1. “What to know about the spectacular collapse of Silicon Valley Bank” NPR, 10 Mar. 2023,

    2. “What is Silicon Valley Bank? Here's what to know after sudden collapse” New York Post , 10 Mar. 2023,

    3. “Dow Jones Futures Fall With Jobs Report Due After S&P 500 Sell-Off; SVB Financial Still Crashing | Investor's Business …” Investor's Business Daily, 10 Mar. 2023,

    4. “Dow closes more than 300 points lower, posts worst week since June as Silicon Valley Bank collapse sparks selloff: Live updates” CNBC, 10 Mar. 2023,

    5. “Troubles at Silicon Valley Bank ripple across Boston tech scene” The Boston Globe, 10 Mar. 2023,

    6. “Are Failing Banks About to Destroy the Economy?” VICE, 10 Mar. 2023,

    7. “Silicon Valley Bank meltdown sparks contagion fears: ‘We found our Enron'” New York Post , 10 Mar. 2023,

    8. “Ackman calls on US government to consider Silicon Valley Bank bailout” Business Insider, 10 Mar. 2023,

    9. “SVB Crash Won't Hurt Financial System if Depositors Are Paid Back: Larry Summers” Bloomberg, 10 Mar. 2023,

    10. “Yellen says Treasury Department ‘carefully' watching crisis at ‘a few banks'” Yahoo News, 10 Mar. 2023,

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