Silicon Valley Bank’s Swoon Should Really Scare Us
The California-based lender to startups dropped 60% on Thursday, taking its far larger peers tumbling with it.
Troubling times.
Photographer: Spencer Platt/Getty Images North AmericaIt was a bad day for the banking industry Thursday. The benchmark KBW Bank Index tumbled as much as 8.1% in its biggest one-day decline since June 2020. The biggest loser in that index was SVB Financial Group, the parent of Silicon Valley Bank, which plunged 60%. It’s not that Silicon Valley Bank was down in sympathy with JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp.; those banking behemoths — and arguably the stock market as a whole — dropped because of Silicon Valley Bank. Wait. Silicon Valley who?
The Santa Clara, California-based bank isn’t exactly a household name, and it’s certainly not big enough to spark a national banking crisis. With around $212 billion in assets, it’s less than a tenth the size of JPMorgan. In fact, it has a very niche business, which is mainly financing technology-related startups.