Silicon Valley Bank reopens to depositors’ delight
Depositors at Silicon Valley Bank were delighted to find that the bank had reopened on Monday after its sudden collapse last Friday.
The collapse was the biggest since the 2008 global financial crisis.
However, President Biden assured the public that all deposits were safe and taxpayers would not be responsible for the bank’s losses.
The bank is now federally run, and depositors are receiving special treatment.
There is no limit on the amount of money insured, as much of the money goes to tech startups, which are seen as the future of American innovation.
On Monday, depositors stood nervously in line, hoping to access their funds.
For many high-tech startups, the collapse of the bank could have been devastating.
“The money here is a godsend to many high-tech startups who might not have been able to make their financial obligations,” said one depositor.
“It’s relief to run the company and to pay the employees and to build a business.”
The losers in the bank’s collapse are the management, senior officers, and shareholders.
The collapse of Silicon Valley Bank raises important questions about the federal limit on deposits.
Should the limit be raised or removed altogether? While raising the limit could make insurance much more expensive, restricting the availability of deposits could prevent crashes in the same way that the stock market stops or delays trading on stocks.
Despite the collapse of Silicon Valley Bank, experts say that the overall banking system is robust and will be able to pay all depositors.
However, there will undoubtedly be investigations into the bank and others to ensure that they can withstand stress tests and other challenges.