-In March 2023, bank failures fell like dominoes in the United States. The sequence of events and the scale of the failures reminded one of the Lehman Brothers collapse in 2008.
Between 10 and 12 March, medium-sized banks Silicon Valley Bank (SVB) and Signature Bank failed and ceased operations. Silvergate Capital, the holding company for Silvergate Bank, also announced retrospectively on 8 March that it was ceasing banking operations and going into voluntary liquidation.
SVB's total assets amounted to approximately JPY 209 billion, or approximately JPY 28 trillion, making it the second-largest US bank failure in history after Washington Mutual's failure in 2008, and the third-largest for Signature Bank. This alone gives an idea of the scale of the problem.
In Europe, the Credit Suisse Group, another major Swiss bank, is in crisis and will be subsequently acquired by USB, another major Swiss bank; on 1 May, First Republic Bank (FRC), based in San Francisco, also collapsed and was sold to JP Morgan Chase & Co. The bank was sold to JP Morgan Chase.
With total assets of USD 229.1 billion, it is the second-largest bank in history, surpassing the previously failed SVB and trailing only Lehman Brothers in 2008. In just two months, so many bankruptcy dominoes have occurred.
--The Japanese are unfamiliar with these financial institutions. What kind of bank was it?
SBV was a bank founded in California in 1983, mainly lending to IT start-ups and VCs investing in start-ups.
About 40% of the US IPOs of IT and healthcare companies funded by VCs in 2022 were so much so that SBV was the bank's counterparty, so you can see how much of its business was dedicated to IT start-ups. Nevertheless, Silicon Valley is a cluster of emerging IT companies, so it is understandable that this would be the strategy.
On the other hand, Signature Bank, which collapsed on 12 March, was founded in 2001 and headquartered in New York. It had 40 branches across the US and was a major transactor with crypto-asset related companies.
The same applies to Silvergate Bank, which began operations in 1988 and was a crypto-asset-focused financial institution, entering the business in the early stages of the boom and holding crypto assets worth USD 2.1 billion as of September 2020.
FRC is a commercial bank and trust company established in 1985, providing wealth management services to high net worth individuals. At one point it had 94 branches in 11 states, including New York, California and Massachusetts.
