Silicon Valley Bank, the 16th largest bank in the US with $175 billion in deposits, has collapsed.
This marks the biggest bank failure in America since the 2008 financial crisis.
The bank primarily served businesses and investors in the tech sector.
The failure was caused by a sudden and significant increase in interest rates, which the bank failed to manage.
Earlier this week, Silicon Valley Bank announced that it took a loss on the sale of bonds due to rising interest rates and would sell shares to shore up its balance sheet.
Its stock price plunged and customers rushed to withdraw their funds.
The FDIC has stepped in and assured customers that they will be able to access their funds by Monday, but the guaranteed amount per depositor is only $250,000.
The collapse of the bank has raised concerns about the banking sector overall, but experts believe the issue is currently contained to this one bank.
The failure has caused anxiety for cash-burning startups who have millions in Silicon Valley Bank and may not be able to access the money they need to pay bills or make payroll.
