Silicon Valley Bank's collapse, explained: what a bank run looks like when it happens over an app instead of in line.

Originally reported as: “Regional bank fails after rapid deposit outflows overwhelm balance sheet”

Silicon Valley Bank, a major lender to tech startups and venture-backed companies, failed on March 10, 2023, becoming one of the largest bank failures in US history at the time. The bank had invested a large share of its deposits in long-term government and mortgage bonds back when interest rates were low, and as the Federal Reserve raised rates aggressively through 2022, the market value of those bonds fell sharply, leaving the bank sitting on large unrealized losses. When SVB announced a plan to raise capital to shore up its finances, it spooked its depositors, many of whom were tech companies holding balances well above the standard $250,000 FDIC insurance limit, and they withdrew roughly $42 billion in a single day, largely via mobile banking apps and word spreading fast on social media. Regulators shut the bank down within 48 hours and took the unusual step of guaranteeing all deposits, even those above the insured limit, to prevent panic from spreading to other banks.