Guides & E-book

When Silicon Valley Bank Fell

Did you know that the Silicon Valley Bank had no head of “risk assessment” for 9 whole months before it’s collapse? Of course social media erupted when they came to know of this. We analyzed audience sentiments towards the collapse and found that there was a negative to neutral sentiment trend. But that’s not all – we also looked at how media houses covered the story, what experts had to say about it, and how it impacted the financial industry. Our analysis covers a period from February 15th to March 13th 2023, focusing on the United States and using English as the language. We used Twitter and news as our sources for this study. If you’re interested in learning more about this significant event and its impact on social media, then our report is a must read.

Key Insights

Rapid Growth and Risk Management Failures: SVB’s rapid expansion, with assets increasing from $71 billion in 2019 to $211 billion in 2022, outpaced its risk management capabilities, leading to significant vulnerabilities. Interest Rate Risk Exposure: The bank’s decision to remove interest rate hedges in 2022, combined with a high concentration of long-term securities, left it exposed to rising interest rates, resulting in substantial unrealized losses. Supervisory Oversight Shortcomings: Regulatory bodies, including the Federal Reserve, did not fully appreciate the extent of SVB’s vulnerabilities as it grew in size and complexity, delaying necessary supervisory actions. Significant Deposit Outflows Leading to Collapse: Ineffective communication of its plan to raise capital, coupled with other market events, led to significant deposit outflows, culminating in SVB’s closure by the California Department of Financial Protection and Innovation on March 10, 2023.