In 1982, Silicon Valley emerged as the global hub for startups, specifically in the technology sector. Household names today, such as Apple, IBM, and Intel, were newcomers to the region and pioneered its growth. One evening, during a poker game, Bill Biggerstaff and Robert Medearis conceived the idea of a bank that would provide capital to startups and serve as an ideal place to park their funds.
Fast forward to 1988, and Silicon Valley Bank went public on the NASDAQ (National Association of Securities Dealers Automated Quotations) stock exchange. Just eight years later, it expanded its presence to fifteen states. The early 2000s brought challenges with the Dot-com bubble (technology companies collapsed in value) and the 9/11 terrorist attacks. Still, by early 2008, Silicon Valley Bank made strides across the United States and established its first international office in Israel. Meanwhile, the financial crisis of the 2008 recession temporarily halted growth at the decade's end. Despite economic challenges, the bank made a remarkable comeback, opening its first UK branch in 2012 and expanding to Ireland and Germany by 2018. It also made strategic acquisitions, including Boston Private and West River Group. The bank was thriving, attracting corporate founders at an astonishing pace.
In 2019, the first cracks began to appear. The Federal Reserve, which is responsible for maintaining low inflation and regulating banks, issued a statement highlighting concerns about SVB. No one knew that this seemingly minuscule citation would mark the beginning of the end for the United States' 16th largest bank.
To be continued in the February edition.
Sources:
Silicon Valley Bank. Silicon Valley Bank a Division of First Citizens Bank. (2023). https://www.svb.com/
The Wall Street Journal. (2023). Breaking news, business, Financial & Economic News, World News and Video. https://www.wsj.com/
CNBC. (2023, December 13). US Top News and analysis. CNBC. https://www.cnbc.com/
Federal Deposit Insurance Corporation. FDIC. (2023). https://www.fdic.gov/
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