{"id":30100,"date":"2023-03-10T08:03:31","date_gmt":"2023-03-10T08:03:31","guid":{"rendered":"https:\/\/www.nsemgh.com\/?p=30100"},"modified":"2023-03-10T08:03:33","modified_gmt":"2023-03-10T08:03:33","slug":"losses-at-silicon-valley-bank-shake-financial-stocks","status":"publish","type":"post","link":"https:\/\/www.nsemgh.com\/2023\/03\/10\/losses-at-silicon-valley-bank-shake-financial-stocks\/","title":{"rendered":"Losses\u00a0at\u00a0Silicon\u00a0Valley\u00a0Bank\u00a0shake\u00a0financial\u00a0stocks"},"content":{"rendered":"\n

Shares in Silicon Valley Bank (SVB), a key lender to technology start-ups, plummeted on Thursday as investors moved to withdraw their deposits.<\/strong><\/p>\n\n\n\n

The slide came a day after the bank announced a $2.25bn (\u00a31.9bn) share sale to help shore up its finances.<\/p>\n\n\n\n

Shares in banks have fallen around the world – with the four largest US banks, including JP Morgan and Wells Fargo, losing more than $50bn in market value.<\/p>\n\n\n\n

One venture capitalist told the BBC the day’s events were “wild” and “brutal”.<\/p>\n\n\n\n

On Friday, shares in Asian banks were also trading lower.<\/p>\n\n\n\n

Shares in SVB saw their biggest one-day drop on record as they plunged by more than 60% and lost another 20% in after-hours trade.<\/p>\n\n\n\n

The firm launched the share sale\u00a0after losing around $1.8bn when it offloaded a portfolio of assets, mainly US Treasuries.<\/p>\n\n\n\n

But more concerningly for the bank, some start-ups who have money deposited have been advised to withdraw funds.<\/p>\n\n\n\n

Hannah Chelkowski, founder of Blank Ventures, a fund that invests in financial technology, told the BBC the situation was “wild”. She is advising companies in her portfolio to withdraw funds.<\/p>\n\n\n\n

“It’s crazy how it’s just unravelled like this… The interesting thing is that it’s the most start-up friendly bank and supported start-ups so much through Covid. Now VCs are telling their portfolio companies to pull their funds,” she said.<\/p>\n\n\n\n

“It’s brutal,” she added.<\/p>\n\n\n\n

A crucial lender for early-stage businesses, SVB is the banking partner for nearly half of US venture-backed technology and healthcare companies that listed on stock markets last year.<\/p>\n\n\n\n

SVB did not immediately respond to a BBC request for further comment.<\/p>\n\n\n\n

In the wider market, there were concerns about the value of bonds held by banks as rising interest rates made those bonds less valuable.<\/p>\n\n\n\n

Central banks around the world – including the US Federal Reserve and the Bank of England – have sharply increased interest rates as they try to curb inflation.<\/p>\n\n\n\n

Banks tend to hold large portfolios of bonds and as a result are sitting on significant potential losses. The falls in the value of bonds held by banks is not necessarily a problem unless they are forced to sell them.<\/p>\n\n\n\n

But, if like Silicon Valley Bank, lenders have to sell the bonds they hold at a loss it could have an impact on their profits.<\/p>\n\n\n\n

“The banks are casualties of the hike in interest rates,” Ray Wang, founder and chief executive of Silicon Valley-based consultancy Constellation Research told the BBC.<\/p>\n\n\n\n

“Nobody at Silicon Valley Bank and in a lot of places thought that these interest rate hikes would have lasted this long. And I think that’s really what happened. They bet wrong,” he added.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares in Silicon Valley Bank (SVB), a key lender to technology start-ups, plummeted on Thursday as investors moved to withdraw their deposits. The slide came a day after the bank announced a $2.25bn (\u00a31.9bn) share sale to help shore up its finances. Shares in banks have fallen around the world – with the four largest […]<\/p>\n","protected":false},"author":8,"featured_media":30101,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_post_source_name":"","_post_source_url":"","footnotes":""},"categories":[61],"tags":[7207,7358,6607,9330,2735,2784,5222,1258,7200,9696,11638,3545,9643,6546,7201,8246,5721,10634,10742,5612,11973,10214,6808,9695,9710,6327,9711,6675,10329,13307,6348,36,594],"class_list":["post-30100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-asian","tag-bank","tag-bank-of-england","tag-banks","tag-bbc","tag-bet","tag-covid","tag-england","tag-federal-reserve","tag-financial-stocks","tag-forced","tag-founder","tag-fund","tag-inflation","tag-interest-rate","tag-jp-morgan","tag-losses","tag-lost","tag-market","tag-money","tag-one","tag-rates","tag-shares","tag-silicon-valley","tag-silicon-valley-bank","tag-stock","tag-svb","tag-technology","tag-trade","tag-trading","tag-us","tag-world","tag-who"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts\/30100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/comments?post=30100"}],"version-history":[{"count":0,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts\/30100\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/media\/30101"}],"wp:attachment":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/media?parent=30100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/categories?post=30100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/tags?post=30100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}