NYPD responded to a Silicon Valley Bank branch in Manhattan Friday morning after investors showed up to try to pull money out of their accounts.
Silicon Valley Bank on Friday was shut down by regulators in the biggest bank failure since the 2008 liquidity crisis.
Silicon Valley Bank reportedly holds $173 billion in deposits.
The Fed interest rate is at 4.57% and $117 billion of Silicon Valley Bank securities are yielding only 1.56-1.66% – this is causing a run on the bank.
California regulators shut down the bank and the FDIC took over.
Silicon Valley Bank holds $173B of deposits.
Fed interest rate is at 4.57%
SVB's $117B of securities (MBS) yield 1.56-1.66%
This is causing a bank run
If enough VC / tech cos pull their money,
—SVB may be bankrupt
—Many startups may be wiped out
—Crash may cause a recession! pic.twitter.com/wA38Mx1edb
— Deedy (@debarghya_das) March 10, 2023
A group of tech investors showed up to the Manhattan branch in New York on Friday morning to pull out their cash.
Journalist Eric Newcomer said he spoke to some of the investors who pulled money out of Silicon Valley Bank.
According to Newcomer, some startups who are contractually obligated to keep their money with SVB, breached their covenants and pulled the money out anyway.
“After all, possession is nine-tenths of the law.” Newcomer wrote in a Substack.
“I spoke to a major investor who said that about ten of his portfolio companies had pulled out about $1.5 billion collectively from Silicon Valley Bank. The companies put in their requests around 6 p.m. Eastern Time Thursday and got their money this morning.” he wrote.
Dor Levi, a former Lyft executive, was one of the investors who showed up to the Manhattan branch to pull his money out.
NYPD showed up at 9:20 am after building management threatened to call the police, according to text messages Newcomer received.
Read more here.
Police Respond to Founders Gathered Outside SVB's New York Office, Withdrawals Continue & JPM Pens Supportive Note https://t.co/mSWrzP4Gkw
— Eric Newcomer (@EricNewcomer) March 10, 2023