The Ripple Effect of Bank Failures on Emerging Markets
Silicon Valley Bank, which began as a small community bank catering to fledgling tech companies, collapsed after its chief executive, Gregory Becker, paid less attention to risk management and was caught flat-footed by economic change. A warning from Moody’s set off a scramble at the bank, which announced a $1.8 billion loss and a hastily put together plan to raise $2.25 billion in fresh capital. The news spooked the bank’s depositors and investors so much that on Thursday, its stock plummeted roughly 60 percent and clients pulled out roughly $40 billion of their money. The Federal Deposit Insurance Corporation, which took over the bank, has since been trying to auction off all or parts of it.
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