California-based Silicon Valley Bank (SVB), which specialised in financing tech startups, has collapsed, reportedly after a flawed capital raise and deposit withdrawals. The bank held $209bn in assets and $175.4bn in deposits. Nearly half of all tech and life sciences firms in the US that received funding were said to bank with SVB. The bank\’s collapse is the second-biggest in US history since the fall of Washington Mutual during the 2008 financial crisis. The US authorities have issued sweeping measures to enable full rescue of depositors\’ money, which will be made available from 13 March. Reports suggest that no contagion is expected to spread to the wider banking sector, but Australian banks, and UK and Israeli tech firms, could be affected to some extent. The fallout from the SVB illustrates the challenges of the tech sector, highlighting the insecurity of start-up firms in that sector. Professor Paul Kofman, Dean of the Faculty of Business and Economics at Melbourne University, highlighted the knock-on effect on superannuation funds, among other concerns.
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