Silicon Valley Bank, the country’s 16th largest bank and a prominent lender for tech startups, collapsed on Friday, causing concerns about the stability of other banks.
The bank’s failure was attributed to clients taking out money to stay afloat amid rising interest rates and costs, which left the bank short on capital.
The collapse, which is now the second biggest bank collapse in the country’s history, saw the FDIC step in to take control of the bank on Friday morning.
While some of the bank’s clients may still face difficulties, depositors with less than $250,000 will ultimately get all their money back, the maximum covered by FDIC Insurance.
Economists say a similar domino effect within the banking industry is unlikely due to changes in the sector, such as holding more capital and undergoing stress tests.
However, the collapse has evoked memories of the 2008 financial crisis.
