On March 10, the failure of Silicon Valley Bank — biggest since the global financial crisis — was playing out in real time as a major lender to the tech industry succumbed to a classic bank run.
A week on, Signature Bank has been shut down, First Republic Bank has been propped up, and the first major threat since 2008 to a bank of global financial significance — Credit Suisse — has been averted after it was taken over by UBS.
Here’s a timeline of what happened:
Friday, March 10: The US government’s Federal Deposit Insurance Corporation (FDIC) took control of SVB. It was the biggest banking collapse in America since Washington Mutual in 2008. The wheels started to come off 48 hours earlier when the bank took a multibillion-dollar loss cashing out US government bonds to raise money to pay depositors. It tried — unsuccessfully — to sell shares to shore up its finances. That triggered the panic that led to its downfall.
Sunday, March 12: The FDIC shut down Signature Bank after a run on its deposits by customers who were spooked by the implosion of SVB. Both banks had an unusually high ratio of uninsured deposits to fund their businesses.
Wednesday, March 15: After watching shares in Credit Suisse collapse by as much as 30%, Swiss authorities announced a backstop for the country’s second-biggest bank. It calmed the immediate market panic but the global player is not out of the woods yet. Investors and customers are worried that it doesn’t have a credible plan to reverse a long-term decline in its business.
Thursday, March 16: First Republic Bank was teetering on the brink as customers withdrew their deposits. In a meeting in Washington, US Treasury Secretary Janet Yellen and Jamie Dimon, the CEO of America’s biggest bank, drew up plans for a private sector rescue. The result was an agreement with a group of American lenders to deposit tens of billions of dollars of cash into First Republic to staunch the bleeding.
Sunday, March 19: Switzerland’s biggest bank, UBS, agreed to buy its ailing rival Credit Suisse in an emergency rescue deal aimed at stemming financial market panic.