The argument this series makes, in 10 steps. It is the same spine every module is built on, and no module states more of it than its own share.
SVB, a bank for technology firms and their venture capital investors, grew from 71 billion dollars of assets in 2019 to over 211 billion in 2021, funded largely by deposits above the 250,000 dollar insurance limit.
SVB put much of its deposits into long-dated bonds; as the Fed raised rates from March 2022 their value fell, leaving over 15 billion dollars of unrealised losses at the end of 2022 in the GAO's preliminary review.
On 8 March 2023 SVB said it had sold 21 billion dollars of securities at a 1.8 billion dollar after-tax loss and would raise 2.25 billion dollars of capital.
On 9 March depositors withdrew over 40 billion dollars, and the bank expected over 100 billion more on 10 March.
The Fed review says the outflows appear to have been sparked by interrelated factors: uncertainty around the technology sector, possible negative rating action, and correlated withdrawals by uninsured depositors in a concentrated network of venture capital investors and technology firms, fuelled by social media.
On 10 March the California regulator closed SVB and the FDIC became receiver.
On 12 March the authorities protected all depositors of SVB and Signature Bank under a systemic risk exception and the Fed opened the Bank Term Funding Program; banks also borrowed heavily through the discount window (primary credit, a separate facility from the BTFP).
SVB UK was sold to HSBC on 13 March; First Citizens took on SVB's deposits and loans on 26 March, at an estimated cost to the FDIC's fund of about 20 billion dollars.
The panic reached First Republic Bank, closed on 1 May 2023; banks with the most uninsured deposits paid for protecting uninsured depositors at SVB and Signature Bank, and the BTFP closed to new loans on 11 March 2024.
Why SVB failed is argued: the Fed's review blames the bank's managers, slow supervision, and the Board's 2019 tailoring after a 2018 law with a shift in supervisory policy, while saying higher standards may not have prevented the failure.