This chapter examines how Europe reacted to the collapse of
Silicon Valley Bank (SVB). The SVB was specialized in banking for technological
startups, and it provided financing for almost half of US venture-backed
technology. On the 10th of March, SVB collapsed, the second-largest failure
since the financial crisis of 2008. The banking failures can significantly
impact the financial system and the financial markets, affecting depositors and
investors’ confidence. In this chapter, the Silicon Valley Bank failure is
analyzed as a case study. We describe the main causes that contributed to the
collapse of SVB, examining the consequences in Europe in terms of effects on
financial systems, markets, and startup ecosystem, as well as in terms of
reactions from supervisory authorities. The results show that the lack of a
risk culture and a limited specific knowledge of the dynamics of the sector
generated disastrous consequences, leading to the collapse of SVB. This chapter
contributes to the literature highlighting how political events can have
significant impacts on the way financial institutions are regulated and
supervised. The study represents a starting point for investigating the
consequences of the SVB bankruptcy, increasing the reflections on effects of
the failure in Europe with other factors that can affect financial systems and
market to formulate any new hypotheses for further future studies.
Author(s) Details:
Domenica Federico,
Faculty of Economics, eCampus University, Novedrate (CO), Italy.
Francesco Napoli,
Faculty of
Economics, eCampus University, Novedrate (CO), Italy.
Antonella Notte,
Faculty of Economics, eCampus University, Novedrate (CO), Italy.
Please see the link here: https://stm.bookpi.org/CRBME-V5/article/view/14183
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