When Silicon Valley Bank (SVB) collapsed on March 10, many were afraid the collapse would cause a bank run. The general public was scared. On the surface, it looked like a lot of innocent people were going to lose money. Ninety-four percent of SVB’s deposits were uninsured, meaning that 94 percent of SVB’s deposits were over the Federal Deposit Insurance Corp. (FDIC) threshold of $250,000.
SVB had also expanded rapidly in the run-up to the collapse, so the ripple effect was felt across the Unite States, even with clients of the former Boston Private Bank, now owned by SVB.
To add to the drama, as SVB was imploding, so was Signature Bank and Credit Suisse. It seemed we were witnessing a global banking collapse….