The collapse of Silicon Valley Bank (SVB) led to rapid withdrawals from 22 banks across the United States last year. This situation caused panic among customers and shook confidence in the banking sector.

Dates of Withdrawals

Customers withdrew significant amounts of cash from unnamed banks on March 10 and March 13, 2023. The newly revised report indicates that some banks lost up to 10% of their assets in a single day.

Measures Taken by Banks

These 22 banks resorted to rapid borrowing to meet the cash outflows. Without selling securities, they borrowed from sources such as Federal Home Loan Banks (FHLB), the Federal Reserve’s discount window, and the Bank Term Funding Program. Some banks increased interest rates to attract new customers back.

Impact on the Financial System

Thanks to these measures, banks managed to recover their deposit losses by mid-2023, though this resulted in higher interest expenses. The report highlights that especially on March 10, a significant asset flight occurred from the largest banks with assets exceeding $250 billion. These actions are seen as crucial steps for ensuring market stability and maintaining the security of the overall financial system.

The collapse of Silicon Valley Bank and the subsequent cash withdrawals serve as an important example of how financial institutions respond in times of crisis.