The recent failure of Silicon Valley Bank and the shutdown of Signature Bank of New York has sparked fears of a wider financial meltdown. Both are ranked among the top 30 U.S. banks by assets, but they are far smaller than the country’s biggest financial institutions, which measure their assets in the trillions.
The two banks catered to the tech industry, which has retreated from the enormous growth of the early pandemic era and is now beset with layoffs. Silicon Valley Bank was crucial to venture capital firms. Signature served as a key financial institution for the cryptocurrency industry.
SVB’s demise is the second-largest failure of a federally insured bank, behind only Washington Mutual, which crashed at the start of the Great Recession in 2008. Since 2001, more than 500 banks have failed, but the vast majority were in the wake of the Great Recession, Federal Deposit Insurance Corp. data shows.
Recent bank failures have paled in comparison to today’s closures, with two banks failing in the fall of 2020, totaling just over $200 million. SVB has over $200 billion assets alone.
Late Sunday, the U.S. government announced that it would guarantee all deposits at SVB and Signature. But other banks are now under intense scrutiny, as their size and the nature of their assets might reveal heightened exposure or pose systemic risks to the financial system, now on edge.
Data on U.S. banks by assets is from the Federal Reserve. Bank failures since 2001 come from the Federal Deposit Insurance Corp.