As inflation rises and the cost of living increases across the country, other signs of economic hardship are beginning to appear in the US. On Friday, March 10, an influential tech investment bank failed its lenders, causing the Federal Deposit Insurance Corp (FDIC) to take over the bank's operation.
This is one of the largest lenders to struggle significantly since the 2008 financial crisis, causing all of America to discuss the implications of the bank's failure.
Users on a popular online news discussion forum share their opinions on the collapse of Silicon Valley Bank and what that means for tech startups and their employees across the country.
Time Is at Stake
Many commenters agree that “most of the money would be recovered with the sale of assets from the bank.” In their opinion, the real problem with the bank's collapse is selling the assets in a short enough period.
It will take a lot of time for the FDIC to review Silicon Valley Bank's assets to be able to release funds to its depositors. “A lot of businesses that have their money within Silicon Valley Bank could need to make multiple payrolls by then,” writes one user.
Many Believe It Will End up Okay for Depositors
Other commenters feel confident that Silicon Valley Bank's depositors will be okay, and delays in payroll won't be delayed past Wednesday.
They believe this because “the rest of the banking sector s well-capitalized, and there's bridge loan financing available from the Big 4,” which refers to JPMorgan Chase, Bank of America, Wells Fargo, and Citibank.
Federal Assistance To Support Startups, Not Bailout The Bank
In a statement made on March 12, Treasury Secretary Janet Yellen explained that all government efforts to support the bank prioritize getting money back into the hands of depositors rather than the bank itself.
Many commenters on the thread express concern that the government is bailing out the company itself, but that isn't the case. One user whose salary is directly impacted by the Silicon Valley Bank collapse shares their opinion on the matter:
“It will most certainly hurt my family (three toddlers, no less) and me very much if something isn't done. I had no control over this. Nor did my CEO, who simply stored money in the bank. It's not a matter of bailing them out. It's about helping many people like me not be financially kneecapped because of things far outside our control.”
This thread inspired this post.
This article was produced and syndicated by Wealth of Geeks.
Maya (she/they) is a queer entertainment and culture journalist. They cover interviews, reviews, roundups, news, and more. She loves horror, history, and creativity. They hope their writing both entertains readers and inspires them to think critically. Her favorite pastimes include needle felting, gaming, and drawing.