The closure of the Silicon Valley Bank in the United States is still brewing, and on March 13, many depositors came to line up outside the bank to wait for withdrawals, and some of them said that they still felt uneasy and worried inside.
Abiy Mahswari, a Silicon Valley bank depositor: We're here to see if we can get the money out quickly, because it's the liquidity we need for our day-to-day operations, and we want to see if we can get a check from the bank.
Mr. Mahswari said that while regulators said they would ensure that deposits from Silicon Valley bank depositors were cashed out, he and his colleagues were still unassured.
Silicon Valley Bank executives were brought in a class-action lawsuit by shareholders
According to the New York Post, on the 13th local time, Silicon Valley Bank Financial Group, the parent company of Silicon Valley Bank, Greg Becker, CEO of Silicon Valley Bank, and Daniel Beck, chief financial officer of Silicon Valley Bank, were filed by shareholders in a class action lawsuit.
Shareholders accused Silicon Valley Bank's parent company and executives of concealing the fact that "rising interest rates will make Silicon Valley Bank particularly vulnerable to a run." A class-action lawsuit against Becker and Baker has been filed in federal court in San Jose, California. This is the first lawsuit to occur since the closure of Silicon Valley Bank.
Former US official: The Fed may be forced to lower the key interest rate
Paul Craig Roberts, assistant to the Treasury secretary during former US President Ronald Reagan, said the Fed would be forced to lower the key interest rate in order to prevent the Bank of America from continuing to close. Roberts said, "The Fed will be forced to abandon the policy of high interest rates because it upsets the balance in the financial sector and causes more sectors to close." He further stated that another way is to allocate a lot of money to bail out financial institutions, but this would threaten the value of the dollar.
Silicon Valley Bank Closes or Causes "Shock Wave"
On March 10, California regulators ordered the closure of Silicon Valley banks, the largest bank closure in the United States since the 2008 financial crisis. According to Bloomberg and other media reports, Silicon Valley Bank is the 16th largest bank in the United States, with assets of $209 billion at the end of 2022, mainly serving start-ups in the technology industry.
In addition, US regulators announced the closure of the New York-based Signature Bank due to systemic risks. In addition to the signature banks, banks such as the First Republic Bank of the United States are facing the dilemma of plummeting stock prices and shrinking market value.