Collapse of SVB

California based Silicon Valley Bank collapsed on Friday, March 10, 2023, thanks to risen interest rates.

Silicon Valley Bank was founded by former Bank of America managers Bill Biggerstaff, Robert Medearis, and Roger Smith, who came up with the idea over a game of poker. It launched on October 17, 1983, as a wholly-owned subsidiary of Silicon Valley Bancshares (now SVB Financial Group) with 100 initial investors. Its first office was located on North First Street in San Jose.

In 2022, SVB began to incur steep losses following increased interest rates and a major downturn in growth in the tech industry, where the bank’s liabilities were heavily concentrated. As of December 31, 2022, SVB had mark-to-market accounting unrealized losses in excess of $15 billion for securities held to maturity. In early March of 2023, a combination of factors—including poor risk management and a bank run driven by tech industry investors—caused the bank to collapse.