The collapse of the Silicon Valley Bank left consequences that are spreading across the world.Fears of contagion reached various countries such as Canada, India, China and Germany. Deutsche Bank, for example, fell in the stock market, exacerbating the crisis in the global financial sector.
And it is that at the end of this week the Fed already announced an impending credit crunch due to the collapse of the SVBand while these phenomena are frequent companions in times of recession, they do not always have the same impact.
But this is not the first time in the past two decades that there has been a financial crisis. According to the Federal Deposit Insurance Corporation (Fdic) There have been 563 bank failures since 2001, fueled by the housing bubble that burst in 2008.
Looking at the largest bank failures in the US over the past 20 years, among the top three of those failures are two companies that collapsed immediately this month: Silicon Valley Bank and Signature Bank.
While SVB is the second largest failed bank in US history, Signature Bank completes the podium, followed by Washington Mutual Bank (WaMu).
How long did these breakdowns last? Topping the list is WaMu, which had approximately $188 billion in deposits and nearly $307 billion in assets as of September 2008.
WaMu was the largest commercial bank in the US and was hit by the crisis in the credit and real estate markets, which resulted in losses on mortgage debt. It was eventually sold to JPMorgan Chase for $1.9 billion.
This housing bubble arose from the millions in losses that banks reported in 2007-2008 on high-risk mortgages that caused an avalanche of failures. These companies had these mortgages, also known as subprime, as collateral and could not control the crisis at the end of this decade.
At SVB, which occupies second place in the list, Deposits were around $175.4 billion and assets were $209 billion. This bank had a niche of tech startups backed by other big companies.
The third facility is Signature Bank, which was seized by the US government on Sunday March 18 after depositors fled after failing to provide reliable and consistent data. it had about $88.6 billion in deposits and $110.4 billion in assets.
“The decision to take possession of the bank and turn it over to the Fdic was based on the current state of the bank and its ability to conduct safe and sound business on MondayThe US Treasury Department said in a statement on Tuesday.
Another company that has announced the closure of its operations, although it is not included in the ranking, it was Silvergate Capital, a bank that returns assets to depositors, that was exposed for its relationship with the crypto marketsince he worked with high-risk crypto companies.
To prevent the risk of contagion, the North American country’s banking regulators granted full access to the funds of all SVB and Signature Bank depositors.
The fourth bank in this ranking is Colonial Bank, which collapsed in August 2009 when it had $20 billion in deposits and $25 billion in assets.. Another financial company hit by the real estate bubble.
Finally, completing the top five is IndyMac Bank, which specializes in subprime mortgages, meaning loans to people with good credit but no proven income or assets $19.1 billion in deposits and $32 billion in assets.