Overview
The collapse of Silicon Valley Bank in March 2023 was the second-largest bank failure in American history. It unfolded over 44 hours — but the signals that preceded it emerged over nearly two years.
Understanding what happened requires reconstructing the sequence: the deposit surge during the tech boom, the interest rate hikes that eroded the bond portfolio, the sector contraction that triggered withdrawals, and the 48-hour cascade that ended in regulatory intervention.
Each signal was visible. The sequence was not — until it was too late.
Timeline Reconstruction
The collapse can be traced through these key moments:
Deposit surge
SVB deposits nearly triple during tech boom, reaching $189 billion
Rate hike cycle begins
Federal Reserve begins raising interest rates
Unrealised losses grow
Bond portfolio loses value as rates rise; losses reach $15.9 billion
Tech sector contraction
VC-backed companies begin drawing down deposits
Internal stress signals
Liquidity concerns emerge internally
Securities sale announced
SVB sells $21 billion bond portfolio at $1.8 billion loss
Capital raise announced
Bank announces plan to raise $2.25 billion
Depositor panic
$42 billion in withdrawal requests in single day
FDIC takeover
California regulators close SVB; FDIC appointed receiver
Signals Involved
A comprehensive reconstruction would require signals from:
Why Chronology Matters
In hindsight, each signal in the SVB collapse was visible to someone. Analysts tracked the unrealised losses. Regulators monitored the deposit concentration. VCs knew their portfolio companies were burning cash.
What was missing was not information — it was chronology. No single view showed how these signals connected over time, how the sequence was accelerating, or how close the system was to cascade failure.
Understanding systemic risk requires understanding sequence. The same signals that appear stable in isolation can appear alarming when viewed as a chronology.
If warning signals are emerging across your organisation, could the sequence be reconstructed in time?
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