Silicon Valley Bank collapse roils markets

The sudden collapse of Silicon Valley Bank caused investors to flee risk assets and seek shelter from the storm in safe haven government bonds last week. The blue-chip S&P 500 and technology focussed Nasdaq indices fell 4.8% and 4.2% respectively.

SVB’s revelation on Wednesday that it was seeking to raise additional capital to cover a $1.8 billion loss it realised from selling its $21 billion bond portfolio triggered a run on its deposits the next day. Within 24 hours, account holders rushed to withdraw $42 billion of deposits and SVB’s share price crashed. On Friday, the Federal Deposit Insurance Corporation stepped in and seized control of the bank. SVB is the largest US bank to fail since Washington Mutual collapsed in 2008.

SVB was formed in 1983 after a game of poker involving founders Bill Biggerstaff and Robert Medearis who had spotted that the burgeoning tech sector was underserved by traditional banks. Within a decade, the Californian bank became a go-to lender for venture capital and tech start-ups but until last week, it wasn’t a well-known name in the wider community.

TEAM plc (LON:TEAM) is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM’s core skill of providing investment management services.

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