Silicon Valley Bank became the biggest U.S. lender to fail in more than a decade after a tumultuous week that saw an unsuccessful attempt to raise capital and a cash exodus from the tech startups that had fueled the lender’s rise.
Regulators stepped in and seized it Friday in a stunning downfall for a lender that had quadrupled in size over the past five years and was valued at more than $40 billion as recently as last year.
The move by California state watchdogs to take possession of the bank, known as SVB, and appoint the Federal Deposit Insurance Corp. as receiver adds to the turmoil at smaller lenders caused by the U.S.’s rapid interest-rate increases. Just days earlier, Silvergate Capital Corp. announced it was shutting its bank down, spurring a broader selloff in industry stocks.
