Silicon Valley Bank collapsed on March 10, 2023

Silicon Valley Bank (SVB) failed on Friday, March 10, 2023, after a bank run that lasted less than 48 hours. The bank had $209 billion in assets at the end of 2022 and was the 16th-largest bank in the United States. By the morning of March 10, it was closed by the Federal Deposit Insurance Corporation (FDIC), which took control of the bank and its remaining assets.

The failure happened because SVB held a large portfolio of long-term bonds purchased when interest rates were low. When the Federal Reserve raised interest rates sharply in 2022, the value of those bonds fell dramatically. SVB could not sell the bonds without taking massive losses. When depositors learned about this problem in early March 2023, they rushed to withdraw their money—a bank run. Within two days, depositors tried to pull out more money than the bank had in cash.

SVB's customer base was unusual: it served venture capital firms, startups, and technology companies rather than typical retail customers. Many of these depositors held balances well above the FDIC insurance limit of $250,000 per account. This made the bank run especially severe, because large depositors had the most to lose and moved fastest to withdraw their funds.

Key Takeaways

  • Silicon Valley Bank failed on March 10, 2023, after depositors withdrew $42 billion in a single day, leaving the bank unable to meet withdrawal requests.
  • The FDIC took control of SVB and protected all deposits—both insured and uninsured—through a special resolution that was announced over the weekend of March 11–12.
  • Most SVB customers recovered their full deposits, including amounts over $250,000, because the FDIC and the U.S. Treasury Department treated the failure as a systemic risk to the banking system.
  • Two other regional banks failed in the same period: Signature Bank on March 12, 2023, and First Republic Bank on May 1, 2023, both also closed by the FDIC.
  • If you had deposits at SVB, you received a notice from the FDIC explaining your account status and how to access your funds through the FDIC's receivership process.

What the FDIC did with SVB deposits

The FDIC took control of SVB on March 10 and announced its resolution plan over the weekend of March 11–12, 2023. The agency's standard approach is to insure deposits up to $250,000 per depositor, per bank, per account ownership category. Deposits above that limit are treated as unsecured claims against the bank's remaining assets, and depositors typically recover only a portion of the excess.

In SVB's case, the FDIC and the U.S. Treasury Department made an unusual decision: they protected all deposits in full, regardless of amount. This meant that even depositors with $5 million or $50 million in the account received 100 percent of their money back. The government justified this decision by citing "systemic risk"—the concern that if large depositors lost money at SVB, they would panic and withdraw funds from other regional banks, triggering a broader banking crisis.

The FDIC did not use taxpayer money to cover the uninsured deposits. Instead, it sold SVB's assets (primarily the bond portfolio) and used the proceeds to pay depositors. The FDIC also created a "loss-sharing" arrangement with other banks, which contributed to a fund that covered the gap between what the assets sold for and what depositors were owed.

How SVB customers accessed their money

SVB customers received notification from the FDIC within days of the closure. The FDIC opened a receivership—a process in which the agency manages the failed bank's assets and pays out depositors. Customers with direct deposit set up at their employers could have their paychecks redirected to another bank almost immediately, because the FDIC coordinated with employers to prevent payment delays.

For customers who needed access to their full balance right away, the FDIC worked with other banks to provide temporary access. Some SVB customers were able to move their accounts to other institutions within a few days. The FDIC also set up a phone line and website where depositors could check their account status and ask questions about the receivership process.

The full resolution took several months. The FDIC eventually sold most of SVB's assets to First-Citizens BancShares in a transaction announced on March 27, 2023. This sale allowed the FDIC to close the receivership and return remaining funds to depositors more quickly than would have happened if the FDIC had managed the assets itself.

Why SVB's failure mattered beyond its own customers

SVB's failure triggered concern about the stability of other regional banks, particularly those with similar business models or similar holdings of long-term bonds. Within two days, Signature Bank (which also served cryptocurrency and fintech customers) failed on March 12, 2023. First Republic Bank, a wealth management bank serving high-net-worth individuals, failed on May 1, 2023. Both were closed by the FDIC.

The failures raised questions about bank regulation and oversight. SVB had been exempt from certain stress-testing requirements and capital rules because it was below $250 billion in assets—a threshold set by the Dodd-Frank Act of 2010. After the SVB failure, Congress and regulators debated whether to lower that threshold and require more rigorous oversight of regional banks.

For most depositors at other banks, the SVB failure did not directly affect their accounts. However, it did prompt many people to review their bank balances and consider whether they needed to split deposits across multiple banks to stay within FDIC insurance limits. It also raised awareness of the fact that FDIC insurance has a $250,000 cap—a limit that many small business owners and investors had not considered before.

What happened to SVB's employees and operations

SVB employed approximately 8,000 people at the time of its failure. Most employees lost their jobs when the bank closed. The FDIC and the acquiring bank, First-Citizens BancShares, retained only a small portion of SVB's staff to manage the transition and wind down operations.

SVB's lending business—which had provided loans to startups and venture-backed companies—ceased immediately. Customers who had outstanding loans or credit lines had to find new lenders or renegotiate terms with other banks. This created disruption in the startup ecosystem, particularly for early-stage companies that relied on SVB for credit facilities.

How to know if you had money at SVB

If you had a deposit account at Silicon Valley Bank, you would have received a letter from the FDIC in March 2023 explaining your account status. The letter would have included information about how to access your funds and what to do next. If you did not receive a letter but believe you had an account at SVB, you can contact the FDIC's receivership office for SVB to verify your account and claim your deposit.

The FDIC maintains a searchable database of failed banks and their receivership information. You can look up SVB by name and find contact information for the receivership office. If your deposit was insured (under $250,000), the FDIC would have transferred it to another bank automatically or paid it out directly. If your deposit was uninsured, you would have been notified of your status as a creditor in the receivership.

Frequently Asked Questions

Did I lose money if I had a deposit at SVB?

Most likely not. The FDIC protected all SVB deposits in full, including those over the $250,000 insurance limit. This was an unusual decision made because of concerns about systemic risk. If you had a deposit at SVB, you received your full balance, though it may have taken a few days or weeks to access it depending on how your account was structured.

What if I had a loan from SVB?

SVB's loan portfolio was sold as part of the receivership process. If you had an outstanding loan, you would have been notified of the new lender or the status of your loan. You may have been required to refinance or renegotiate terms with the new lender. Contact the FDIC's SVB receivership office if you are unsure about the status of your loan.

Can I still access my SVB account online?

No. SVB's online banking system was shut down when the bank closed on March 10, 2023. If you need information about your account, contact the FDIC's receivership office for SVB. They can provide account statements, verify your balance, and help you claim your deposit if you have not already done so.

Why did the government protect deposits over $250,000?

The FDIC and Treasury Department cited "systemic risk"—the fear that if large depositors lost money at SVB, they would panic and withdraw funds from other banks, triggering a broader crisis. This decision was controversial because it broke the standard rule that deposits over $250,000 are not fully insured. The government argued that protecting all deposits was necessary to prevent a cascade of bank failures.

Did taxpayers pay for the SVB bailout?

No. The FDIC paid for the protection of uninsured deposits by selling SVB's assets and using a loss-sharing arrangement with other banks. Taxpayers did not directly fund the resolution. However, the decision to protect uninsured deposits did create costs that were ultimately borne by the banking system as a whole through higher FDIC insurance premiums.