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NEW YORK (AP) -- The U.S rushed to seize the assets of Silicon Valley Bank on Friday after a run on the bank, the largest failure of a financial institution since Washington Mutual during the height of the financial crisis more than a decade ago.
Silicon Valley, the nation's 16th largest, failed after depositors -- mostly technology workers and venture capital-backed companies -- began withdrawing their money as anxiety about the bank's situation spread this week.
Silicon Valley was heavily exposed to tech industry and there is little chance of contagion in the banking sector similar to the chaos in the months leading up to the Great Recession more than a decade ago. Major banks have sufficient capital to avoid a similar situation, though the sector has been under pressure all week.
Silicon Valley's failure came with incredible speed, with some industry analysts on Friday suggesting it was a good company and still likely a wise investment. Silicon Valley executives were looking to raise capital early Friday or find additional investors in the company. But trading in its shares had been halted before the opening bell due to extreme volatility.
Shortly before noon eastern time, the Federal Deposit Insurance Corporation announced it was shuttering the bank. Notably, the FDIC did not wait until the close of business to seize the bank, as is typical in an orderly wind down of a financial institution. The FDIC could not immediately find a buyer for the bank's assets, signaling how fast depositors had cashed out. The bank's deposits will now be locked up in receivership.