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A Silicon Valley bank with total assets of over 270 trillion won has gone bankrupt just two days after rumors of a crisis.

This has caused turmoil in the global financial markets.

Washington correspondent Nam Seung-mo reports on how this will affect us.

The sudden bankruptcy of the Silicon Valley bank, which has played a role in funding many startups in the US, has left customers in despair.

The main reason for the bankruptcy was the rapid increase in interest rates by the US Federal Reserve, which caused the value of bank-held bonds to plummet, leaving the bank with no choice but to sell them at a loss.

When news of this spread, the bank’s stock prices plunged and a run on deposits began, resulting in the bank’s collapse just two days after the rumors of a crisis surfaced.

With total assets of 20.9 billion dollars or 276 trillion won, it is the 16th largest bank in the US and the second largest bankruptcy in history.

The New York Stock Exchange plummeted as well, and Asian markets, which closed before the bankruptcy, were shaken by news that the market capitalization of the top four US banks had evaporated by 52 billion dollars.

US financial authorities immediately responded, but it is unlikely that interest rate increases can be avoided for some time, which is causing anxiety among investors and customers.

The problem is that if US financial authorities cannot alleviate investor and customer anxiety, a major bank failure could result in a stock market crash and a massive run on deposits, leading to another financial crisis, similar to the one that began in 2008 due to interest rate increases.

This is why our financial authorities should keep a close eye on this situation.

This is Nam Sung-mo reporting from Washington for SBS.

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