Silicon Valley Bank (SVB) was reclaimed by federal regulators on Friday, after a mass run on the financial institution precipitated the second-largest banking collapse in American history.
The California-based SVB was known for its work with venture capital firms, and was described by CNN as "the go-to bank for US tech startups," holding more than $209 billion in total assets. However, the trouble began Wednesday when SVB announced that it was facing a liquidity squeeze, and needed to raise more than $2 billion dollars to fix its balance sheet.
This resulted in a massive run by the bank's customers to withdraw their deposits, with a California regulatory filing cited by CNBC noting that SVB customers took out more than $42 billion by Thursday. The bank was simply unable to handle the withdrawals, and had completed failed within 48 hours.
The Federal Deposit Insurance Corporation (FDIC) officially took over control of SVB on Friday, saying in a press release that it had received the bank's $175 billion in customer accounts and placed them in a federal holding bank. The FDIC said that "all insured depositors will have full access to their insured deposits no later than Monday morning."
However, TIME reported that up to 85 percent of SVB's deposits were uninsured, causing a large headache for many investors. The FDIC said that uninsured investors "will receive a receivership certificate for the remaining amount of their uninsured funds." While the agency said that future dividends "may be made" to uninsured investors, there is no guarantee they will be paid.
The failure of SVB is the largest American bank failure since the 2008 economic crisis, and second in scale only to Washington Mutual's collapse during that period. With so much of SVB's assets uninsured, though, TIME noted, "nobody's sure how much of that cash is left."