Which U.S. bank failure in March 2023 became the second-largest bank failure in American history?

Silicon Valley Bank became the second-largest bank failure in American history when regulators closed it on March 10, 2023.

The bank served many technology companies and venture-capital-backed startups. During the period of low interest rates, it invested heavily in longer-term securities. When interest rates rose, those securities lost market value. At the same time, technology companies withdrew deposits as venture funding became harder to obtain.

A public announcement that the bank needed to raise capital intensified a depositor run. California regulators then closed the institution and appointed the Federal Deposit Insurance Corporation as receiver. The failure caused sharp volatility in bank shares and raised concerns about other banks with concentrated deposits or large unrealized securities losses.

Silicon Valley Bank was not the largest U.S. bank failure overall. Washington Mutual, which failed in 2008, held more assets at failure. The 2023 episode also included the closure of Signature Bank shortly afterward.