The American bank SVB Financial Group, which owns Silicon Valley Bank, saw its shares fall by 60% on Thursday after announcing losses of $1.8 billion from selling investments. As a result, the bank caught the attention of American authorities, who announced on Friday that they had closed the Silicon Valley Bank, a bank known for being close to the tech industry and which had suddenly found itself in trouble.

US authorities confirmed they had entrusted the control of the deposits to the agency responsible for guaranteeing them (FDIC). The FDIC plans to reopen the bank's 17 branches on Monday, based in California and Massachusetts. It plans to allow customers to withdraw up to $250,000 in the short term, which is the amount usually guaranteed by the FDIC. Customers with more than this on their bank accounts, the majority of the bank's clients, are encouraged to contact the agency.

The Californian bureau of financial protection and innovation (DFPI) officially took possession of the establishment, citing "its lack of liquidity and insolvency." It entrusted the management of the bank to the FDIC, which created a specific entity to manage the bank's assets, withdrawals, and outstanding loans.

At the end of 2022, the bank had $209 billion in assets and around $175.4 billion in deposits, according to authorities. Although little known to the wider public, it was still the 16th largest bank in the United States by assets. Based in Santa Clara, California, Silicon Valley Bank specialized in the technology sector, primarily doing business with clients who benefited from venture capital or private equity funds. These clients, facing their own difficulties amid rising interest rates and turmoil in the tech industry, had withdrawn a lot of money from their accounts in recent months.

The closure of Silicon Valley Bank has significant consequences for the bank's clients and employees. While clients are allowed to withdraw up to $250,000, those with more on their bank accounts are encouraged to contact the agency for more information. As for the bank's employees, there is no further information yet on their specific fate. However, it is possible that some of them may be laid off or transferred to other financial institutions. The FDIC, who has taken control of the bank, will work with employees to manage the transition and minimize disruptions for them.

The closure of Silicon Valley Bank could also have repercussions for the technology industry in the Silicon Valley region. The bank specialized in the technology sector, primarily doing business with clients who benefited from venture capital or private equity funds. The closure of the bank could potentially restrict access to financing for technology companies in the region.

Ultimately, it is still too early to say what the long-term consequences of the closure of Silicon Valley Bank will be. American authorities are currently working to manage the transition and minimize disruptions for the bank's clients and employees, but it will take time to see how the technology industry in the region will adapt to this change.