The four largest US banks lost $52 billion in market value on Thursday after shares in Silicon Valley Bank (SVB) Financial, a major lender to the technology industry, fell 60%. The problems at the bank have raised concerns about the banking sector as a whole, with major European banks also seeing bigger share falls. After SVB’s attempt to save itself with a recapitalization fell through, US financial regulators closed the bank and took control of its deposits.
All this has a domino effect on Credit Suisse.
Credit Suisse postpones its annual report following a call from the SEC (the U.S. Securities and Exchange Commission).
Imagine waking up without everything you had. No bed, no couch, no clothes—including a comfy old sweater. Overnight, you are virtually left without everything. That is what happened to 10,000 companies these days when the US Silicon Valley Bank closed its doors. We cannot imagine what that feels like. What will the bankers say? ‘Sorry, we have just lost your USD 10 million’.
Imagine you are an entrepreneur and you have spent years building a business, providing jobs for many employees, raising funds from investors, and expanding the business. Suddenly, all the funds disappear, and you are unable to pay your employees their salaries on Friday.
Again, we are left wondering what to say to investors, employees, suppliers, and other creditors when the finances run out. We did not think that one of Silicon Valley’s most trusted banks could have bought billions of dollars worth of overvalued and out-of-date bonds and then, by buying them, precipitated their liquidation.”