✍🏾: @callmedr.c
Okay, so if you’ve paid even the smallest morsel of attention since last Friday, you’ve heard or seen the fall of #SVB and now know, they’re receiving a bail out in addition to the banks parent company filing for bankruptcy the morning of March 17, 2023. Meanwhile, there’s not a lick of Student Loan Debt Relief.
With the majority of us not being in the financial world, we found some great bullet points from Twitter’s @BuildingBread that helped break it down.
Silicone Valley Bank is the 16th largest bank in the nation and “home” to more startup and tech companies than we can name but there was also the fall of Signature Bank.
Some experts have said not to worry, at least not at this point because what happened for these banks to crash the way they did was a “old fashioned” Bank Run.
Here’s what we know:
Too many depositors wanted their funds withdrawn, at once. When money is deposited; say $25 – the bank loans half of that to someone and then tacks on interest to make their profit on the back end. Typically, the system works unless too many are unable to pay their loans or, as in this case, too many depositors want to withdraw at once.
Matthews states in the thread that the tech sector has been struggling since the Fed increased interest rates. The tech sector also happens to be the majority of clientele for Silicone Valley Bank.
Since SVB’s “crisis” this past Friday, we’ve heard of a few others falling into the same boat. We’ll keep an eye on things and provide updates as we move forward. #BWLM💕
