From The Economist Espresso on March 11, 2023.

American regulators closed Silicon Valley Bank amid a run on the tech-focused lender. The Federal Deposit Insurance Corporation took control of SVB’s $175bn-worth of deposits and said insured depositors would have access to their money on Monday. America’s 16th-largest bank, having seen its deposits shrink during the VC winter, had failed to raise enough cash to stay afloat. The S&P 500 dipped by 1.5% on Friday to finish its worst week since September.

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Signs of the stress at SVB were spilling over into other parts of the financial world late on Friday. The price of cryptocurrency USDC, a stablecoin which is pegged to the value of the dollar, fell to as low as $0.88. Circle, the payments company which manages USDC, confirmed that around $3.3bn of its $40bn in reserves was deposited with SVB.

Jamie Thingelstad @jthingelstad

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