California banking regulators shut down the Silicon Valley Bank and put it under the control of the Federal Deposit Insurance Corporation after the lender's efforts to raise capital through a stock sale failed
in the banking sector and its vulnerability to the rising cost of money.
"There could be a bloodbath next week as banks are in trouble, the short sellers are out there and they are going to attack every single bank, especially the smaller ones," said Christopher Whalen, chairman of Whalen Global Advisors.met banking regulators on Friday expressed "full confidence" in their abilities to respond to the situation, Treasury said.in U.S. financial regulators, when asked about the failure of SVB.
To fund the redemptions, SVB sold a $21 billion bond portfolio consisting mostly of U.S. Treasuries on Wednesday, and said it would sell $2.25 billion in common equity and preferred convertible stock to fill its funding hole.this week to reassure its venture capital clients their money was safe. By Friday, the collapsing stock price had made its capital raise untenable and sources said the bank tried to look at other options, including a sale, until regulators stepped in and shut the bank down.
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