Explainer -Silicon Valley Bank crisis: What led to stock crash, what lies ahead?4 min read . Updated: 10 Mar 2023, 12:52 PM IST
- The crisis has emerged ahead of the US Fed meeting, which might hike the interest rate for the ninth time since 2022
- Several experts have compared the current SVB crisis with Lehman Brothers and Evergrande's liquidity crisis
America's Silicon Valley Bank (SVB), one of the most prolific lenders in the private market ecosystem, has been embroiled in a major crisis. SVB Financial Group bonds plunged alongside its shares after the company moved to shore up capital after losses on its securities portfolio and a slowdown in funding. Several experts have compared the current SVB crisis with Lehman Brothers and Evergrande's liquidity crisis. Moody's, which has downgraded the rating of the Silicon Valley Bank, said that rising interest rates, increased macroeconomic uncertainty, venture capital investment activity, and high cash burn among SVB's clients have created challenging conditions for the firm.
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