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The news was enough to send shockwaves through the whole U.S. banking sector, with even stalwarts such as JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) stocks falling by over 5%. The Dow Jones Banks index fell 6.5% to its lowest in five months, while the S&P 500 Financials index fell 4.1%.
SVB's clients are overwhelmingly made up of technology startups, who for the last decade have largely been able to raise all the money they need from venture capitalists. However, with that source of money drying up, they're now running down their bank deposits increasingly quickly. SVB has had to liquidate a big chunk of its securities portfolio to meet the demand for cash, and because bond prices have fallen sharply as the Federal Reserve has raised interest rates over the last year, SVB has crystallized a loss of around $1.8B. Hence the need for $2.25B in fresh capital.
https://www.investing.com/news/stock...report-3027204
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