Largest Bank in the U.S. Files for Bankruptcy

The largest bank in the U.S. has declared bankruptcy for the first time since the 2008 financial crisis. California regulators have announced the insolvency of Silicon Valley Bank, the 16th largest bank in the country, which specialized in working with startups in Silicon Valley.

At the end of 2022, 89% of its deposits were uninsured, amounting to approximately $175 billion. According to Reuters, the fate of the uninsured deposits remains to be determined. Companies such as gaming developer Roblox Corp and streaming media player manufacturer Roku Inc have already reported hundreds of millions of dollars in deposits with SVB. Roku's shares fell by 10% after it was revealed that a significant portion of its investments was uninsured.

SVB has been placed under the management of the federal commission. The remaining capital will be allocated to compensate depositors and settle debts owed to creditors. The White House has reported that Treasury Secretary Janet Yellen is 'closely monitoring the situation.' Cecilia Rouse, chair of the Council of Economic Advisers at the White House, noted that the U.S. banking system now 'fundamentally differs from how it was a decade ago.'