Should the rest of the world be worried about the collapse of Silicon Valley Bank last week? SVB was the 16th largest bank in the United States, with about $210 billion (7.3 trillion baht) in assets and a market valuation of $44 billion at its peak.
That makes this the second-largest US bank failure (following Washington Mutual in 2008). Although SVB itself was not systemically important to the US financial system, it could be a warning sign. This past weekend, regulators also shut down New York's Signature Bank, and banking-sector stocks tanked.
SVB catered primarily to start-ups and venture capital funds, a rather narrow circle of depositors that quickly withdrew $42 billion -- about one-quarter of the bank's deposits -- at the first sign of trouble. The run came so suddenly that the Federal Deposit Insurance Corporation (FDIC) was forced to intervene during a weekend. Yet given that 96% of SVB's deposits were uninsured, its clients had good reason to panic.
