Silicon Valley Bank has been seized by regulators after a run on deposits caused the lender to collapse. The hit was described as the largest US banking failure since the Great Recession in 2008.
California state regulators shut the Santa Clara-based bank on Friday.
The Federal Deposit Insurance Corporation immediately took possession of the bank’s $209billion in assets and $175billion in deposits.
The bank was the 18th largest in the US and had a particular market for tech startups and wealthy entrepreneurs around Silicon Valley.
However, its collapse came just two days after the bank disclosed plans to raise over $2billion from investors.
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The proposal was brought in as the bank attempted to counter $1.8billion in losses from the sale of bonds.
Customers reacted by withdrawing their deposits over fears the bank faced insolvency, with shares having their biggest one-day drop on record on Thursday.
Following the shutdown, the Federal Deposit Insurance Corporation said Silicon Valley Bank depositors will have full access to their insured deposits no later than Monday morning.
Each depositor will also be insured to at least $250,000, MailOnline has claimed.
A start-up founder revealed how they were coping with the situation.
They told the BBC: “I’m on my way to the branch to find my money right now.
“Tried to transfer it out yesterday didn’t work.
“You know those moments where you might be really screwed but you’re not sure? This is one of those moments.”
US Treasury Secretary Janet Yellen revealed on Friday she was monitoring “recent developments” at Silicon Valley Bank and others “very carefully”.
She added: “When banks experience financial losses, it is and it should be a matter of concern.”
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