Until a little under two weeks ago, Silicon Valley Bank was the sixteenth largest bank in the United States, the favoured choice of tech startups due to the tailored services it provided. But by 10th March 2023, American authorities were taking control of SVB following its collapse. It had assets of over $200bn, making for the second biggest bank failure in US history.

There were a number of factors behind the collapse, and it’s causing concern as it’s common for one bank collapse to be followed by another, due to what’s called financial contagion. Indeed, just a few days later it was the turn of New York-based Signature Bank to collapse. And over in Europe, Switzerland’s second largest bank Crédit Suisse had to take out a $54bn to stay afloat, before then being bought out by the country’s largest bank UBS, in a bid to halt the crisis.

Why did Silicon Valley Bank collapse? How do stock market crashes happen? In under 3 minutes, we answer your questions!

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A Bababam Originals podcast, written and produced by Joseph Chance.

In partnership with upday UK.

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