Wall Street Braces for the Next Silicon Valley Bank
Shares of regional banks tumble amid concern that SVB’s collapse is only the beginning.
Adding to the stress, a major cryptocurrency declined sharply over the weekend following the disclosure that its operator, Circle Internet Financial Ltd., had $3.3 billion tied up in Silicon Valley Bank.
USD Coin fell below 87 cents on Saturday morning, according to data from CoinDesk. The virtual currency, known as a stablecoin, is designed to trade at $1.
Its decline echoes a crucial point in the 2008 financial crisis when a money-market fund widely treated as cash-equivalent “broke the buck” in the wake of the failure of Lehman Brothers.
As of the end of last year, Silicon Valley Bank had an estimated $151 billion in uninsured deposits, according to the annual report of SVB Financial Group, its parent company.
First Republic Bank, another major regional bank, had roughly $120 billion, and Signature Bank had around $80 billion of uninsured deposits.
WSJ 12 March 2023