U.S., Britain hustle to stop a potential banking crisis after Silicon Valley Bank collapse | CBC News

Governments in the US and UK have taken steps to prevent a potential banking crisis after the failure of California-based Silicon Valley Bank, which had over $200bn in assets and catered to tech startups, venture capital firms, and well-paid technology workers. Regulators in the US rushed to close Silicon Valley Bank on Friday when it experienced a traditional bank run, where depositors rushed to withdraw their funds all at once. It is the second-largest bank failure in US history, behind only the 2008 failure of Washington Mutual. The collapse set off a wave of panic in the tech sector as thousands of small and medium-sized companies stood to lose billions in deposits. The UK government facilitated the sale of Silicon Valley Bank UK to HSBC and Canada took temporary control of its Canadian branch. US officials assured all of the bank\’s customers that they would be able to access their money on Monday. The Asian and European markets fell, but not dramatically, and US futures were down.

The extensive emergency lending program, which is intended to prevent a wave of bank runs and protect the bank\’s customers, will allow depositors at Silicon Valley Bank and Signature Bank to access their money on Monday. Deposit holders, including those whose holdings exceed the $250,000 US insurance limit, will be able to access their money. The Treasury has set aside $25 billion US to offset any losses incurred under the Fed\’s emergency lending facility. Though Sunday\’s steps marked the most extensive government intervention in the banking system since the 2008 financial crisis, the actions are relatively limited compared with what was done 15 years ago.

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