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    Vikshita Vitthal Gujaran in News

    10-Mar-2023 07:35 AM


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    Silicon Valley Bank Urges Clients To "Stay Calm" After 60% Stock Tumble

    Silvergate Capital Corp.'s abrupt shutdown and SVB Financial Group's hasty fundraising have sent US bank stocks diving and tongues wagging across the industry: Could this be the start of a much bigger problem?
    But below that is a crack reaching across finance: Rising interest rates have left banks laden with low-interest bonds that can't be sold in a hurry without losses.
    That would erode what banks earn on lending, slashing earnings.
    Every bank in the S&P 500 Financials Index tracking major US firms slumped on Thursday, taking the benchmark down 4.1% - its worst day since mid-2020.
    But suddenly "the market has really focused on it because there's an obvious surprise with the capital raise from Silicon Valley Bank."
    Hours after CEO Greg Becker urged clients to "stay calm" on a conference call Thursday, news broke that a number of prominent venture capital firms, including Peter Thiel's Founders Fund, were advising portfolio companies to pull money as a precaution.

    Source - NDTV