Following its failure to raise capital, Silicon Valley Bank fails.

After a crazy 48 hours highlighted by a bank run and a capital crisis, Silicon Valley Bank collapsed on Friday morning, becoming the second-largest financial institution failure in American history.

As a result, California officials closed the technology lender down and handed it over to the US Federal Deposit Insurance Corporation, which will now serve as a receiver. This typically involves selling off the bank’s assets to pay back its clients, including depositors and creditors.

All insured depositors would have full access to their protected funds by Monday morning, according to the US Federal Deposit Insurance Corporation (FDIC), an independent government agency tasked with protecting bank savings and overseeing financial institutions. Uninsured depositors would get a “advance dividend” throughout the course of the following week.

Silicon Valley Bank, which was once owned by SVB Financial Group, was contacted multiple times but never responded.

Several banks were impacted by the company’s stock decline on Thursday. By Friday morning, SVB’s shares had been suspended after fruitless attempts to quickly raise capital or find a buyer. Other bank equities that were briefly suspended on Friday were First Republic, PacWest Bancorp, and Signature Bank.

Given that the FDIC typically only intervenes after the market closes, it is important to note that the timing of the takeover in the middle of the morning was uncommon.

Dennis M. Kelleher, the CEO of Better Markets, said:

SVB’s condition worsened so swiftly that five more hours weren’t enough to save it. That’s because depositors were withdrawing money from the bank so quickly that it became insolvent, and an intraday closure was forced by a traditional bank run.

Silicon Valley Bank’s decline can be partly ascribed to the Federal Reserve’s rapid execution of interest rate hikes throughout the previous year.

Banks made significant investments in long-term, ostensibly low-risk Treasury bonds during the era when interest rates were almost zero. The value of those assets, however, fell when the Fed increased interest rates to fight inflation, causing banks to accrue unrealized losses.

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