Silicon Valley Bank, a mainstay in California's technology industry, has been taken over by Federal regulators. Citing a lack of funds due to a sell-off of "assets affected by higher interest rates," SVB was attempting to urgently raise $2.25 billion when the regulators stepped in.
I have no clue what assets are not affected by higher interest rates, or what the heck happened here. When I was actively working with startups Silicon Valley Bank was a trusted partner and the lender of choice for technology startups.
Officials said they shut the bank to "protect insured depositors".
The Federal Deposit Insurance Corporation (FDIC), which typically protects deposits up to $250,000, said it had taken charge of the deposits.
Clients with insured deposits would have access to funds "no later than Monday morning", it said, adding that money raised from selling the bank's assets would go to uninsured depositors.
The episode came after SVB said it was trying to raise $2.25bn (£1.9bn) to plug a loss caused by the sale of assets affected by higher interest rates.
The news caused investors to flee the bank. Shares saw their biggest one-day drop on record on Thursday, plunging more than 60% and fell further in after-hours trade.
Concerns that other banks could face similar problems led to widespread selling of bank shares globally on Thursday and early Friday.