Larget US Bank Fails, First time after 2008 financial crisis

Twitter into Banking

Silicon Valley (becomes Largest US bank) Fails, Breaking the History of 2008

Why Silicon Valley bank collapsed?

Filed for bankruptcy the decision to shut the bank was taken after its shares plunged 60% on Thursday over concerns it was running low on available cash. the 16th largest bank collapsed as depositors rushed to withdraw money over concerns of bank's health.

As of December 2022, the bank had roughly $209 billion in total assets. Silicon Valley Bank's CEO sold $3.6 million of stock days before its collapse. Becker sold the shares on February 27 under trading plan that was filed in January. Before its collapse, the bank revealed extensive losses and said it would try to raise capital, causing its shares to crash 60%.

How will it affect?

As this bank used to provide fund to many startups, thus may create a chain effect, affecting many connected startups, as well as various prominent companies.

Idea of twitter buying Silicon Valley bank-

CEO of twitter, Elon Musk tweeted he is "open to the idea" of Twitter buying the Silicon Valley Bank and turning it into a digital bank.

What is Response of Other Prominent Companies and Professionals?

1. ROKU on SVB collapse-

Streaming firm Roku reveals 26% of its cash worth $487 mn is held with SVB Shares of streaming media company Roku declined after it revealed deposited amount with the failed Silicon Valley Bank. Roku said the deposits are largely uninsured and it doesn't know "to what extent" it will be able to recover them. Other companies who hold deposits in SVB include Roblox, BlockFi and Rocket lab

2. Garry Tan on SVB collapse-

Thousands of startups might die, it's extinction-level event: Garry Tan on SVB collapse. Startup accelerator Y Combinator's CEO Garry Tan called the Silicon Valley Bank's collapse an "extinction-level event" for startups and said it will set startups back by at least 10 years. The most pressing issue startups that held deposits with the SVB face is payroll, the investor said, adding that "thousands of startups" might die before they get back their funds.

3. Snapdeal's Kunal Bahl on collapse-

SVB's debt line to us in 2012 kept us going: Snapdeal's Kunal Bahl. Snapdeal Co-founder Kunal Bahl took to Twitter amid the collapse of California-based Silicon Valley Bank (SVB). He said, "In 2012, in the midst of pivoting our business model...we found ourselves in a cash crunch as investors weren't convinced we could pull it off". "SVB extended a small debt line to us that kept us going." he added.

4.Vembu on SVB collapse-

Insane valuations can disappear overnight too: Vembu on SVB crisis. Zoho CEO Sridhar Vembu, reacting to the collapse of Silicon Valley Bank, tweeted, "Tough times ahead and we must build to be resiliert". "[The] sudden collapse reminds us of the fragile foundation of bubble-fueled prosperity the world saw when valuations and net worth appeared to reach insane heights overnight," he added, while warning that such valuations can "disappear" overnight too.       

                     

5. Elon Musk and tesla on collapse-

Elon Musk exercises options to acquire 10,500 Tesla shares. Tesla CEO Elon Musk has exercised options to acquire 10,500 shares of the electric-vehicle maker, US securities filing showed on Friday. The development comes a month after it was revealed that the billionaire gave around 11.5 million shares of his stake in Tesla, worth about $1.9 billion, to charity last year. He owns roughly 13% of Tesla.

S&P 500 index suffers

S&P 500 index suffers biggest weekly percentage loss since Sept. US' S&P 500 index of 4.77% on Friday after declining 1.45%. This came after California-based Silicon Valley Bank was shut down on Friday after its stock crashed 60% in a day. All three major US stock indexes ended the session down more than 1%, with Nasdaq suffering the largest percentage loss.

Adani Group issues

Governance, board independence issues found at Adani Group: MSCI. MSCI ESG Research said it has identified issues related to governance, board independence, related party transactions and controlling shareholders at various Adani Group firms. The company stated that it recently downgraded its assessment of Hindenburg- related cases to 'moderate' from 'minor' after new developments in them. The downgrades didn't affect the overall ESG Ratings of each firm, it added.

Adani moved to Stage 2 of NSE

Adani firms moved to stage 2 of NSE's long-term surveillance. Adani Transmission and Adani Total Gas will be included under the second stage of the long- term additional surveillance measures framework, the NSE and BSE said on Friday. The move will be effective from March 13, the exchanges added. Earlier, the exchanges had also moved Adani Green Energy and New Delhi Television (NDTV) to the second stage surveillance.

Adani group shares pledged as security for loans

More Adani group shares pledged as security for loans. SBICap Trustee in notices to stock exchanges said that a further 0.99 per cent shares in Adani Green Energy Ltd were pledged "for the benefits of the lenders" of Adani Enterprises Ltd. An additional 0.76 per cent shares in Adani Transmission Ltd were also pledged to banks, the trustee said. With the latest pledge, the total shares in Adani Green Energy Ltd - the group's renewable energy company - that were encumbered with SBICap was 2%. In the case of Adani Transmission, this came to 1.32 per cent.

Nirav Modi Borrowed

Nirav Modi borrowing Rs.10 lakh a month to pay back Rs.146 lakh fine in UK: Reports. Fugitive Nirav Modi reportedly said he has no funds to pay legal costs worth £150,247 (Rs.146 lakh), related to his extradition appeal proceedings. Appearing via video conference, Modi told a UK court he'd have to borrow money to pay £10,000 (Rs.9.8 lakh) every month to clear his fine. The court allowed Modi to pay Rs.9.8lakh per month for six months.

India's forex reserves grow, the first rise in 5 weeks

India's forex reserves grow to $562.4 bn, the first rise in 5 weeks

India's foreign exchange reserves increased by $1.46 billion to reach $562.40 billion as of the week ended March 3, according to Reserve Bank of India (RBI) data.

This was the first rise in foreign exchange

reserves in five weeks. The rise came on the

back of growth in the value of foreign currency assets to $497.1 billion.

Ford about to cut jobs

Ford to cut 1,100 jobs in Spain after layoffs in Germany, UK. Ford on Friday said it'd cut about 1,100 jobs at a plant in Spain as part of "a profound restructuring of its operations". In February, Ford said it'd cut around 3,800 jobs in Europe, mostly in Germany and the UK, over the next three years. Ford had said it was looking for "a leaner, more competitive cost structure in Europe".

Conclusion-

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