How did the second largest banking collapse happen in the ‎United States?!‎

The crisis that afflicted the “Silicon Valley” bank, which the US ‎authorities decided last Friday to close, sparked a wave of ‎panic across the banking sector, amid questions in the markets ‎about the consequences of the largest US bank bankruptcy ‎since the global financial crisis in 2008.‎

Where the bank was unable to meet the huge withdrawals ‎made by its customers of their money, who are especially ‎active in the field of technology, and its attempts to increase ‎capital quickly did not succeed.‎

After it closed the Californian bank, the American Deposit ‎Insurance Agency imposed its supervision on the institution, ‎which is expected to reopen later under a new name.‎

The American “Silicon Valley” bank is a well-capitalized ‎institution that seeks to raise some funds. However, within 48 ‎hours, panic over large withdrawals by the bank’s customers ‎led to the termination of the bank’s 40-year service.‎

Banking crisis:‎

On Friday, regulators closed the bank and confiscated its ‎deposits in what is known as the largest US banking failure ‎since the 2008 financial crisis and the second largest ever.‎

Downward spiral:‎

The company’s downward spiral began late Wednesday, when ‎it surprised investors with news that it needed to raise $2.25 ‎billion to shore up its balance sheet. This was followed by the ‎rapid collapse of the highly respected bank that had grown ‎alongside its technology clients.‎

Rising fears:‎

Concern has been growing among tech workers, especially ‎since the collapse of Silicon Valley represents not only the ‎biggest bank failure since Washington Mutual in 2008, but also ‎the second-largest retail bank failure in the US. For her part, US ‎Treasury Secretary Janet Yellen called on many financial sector ‎regulators to discuss the situation, and assured them that she ‎was “fully confident” in their ability to take appropriate ‎measures and that the banking sector remains “resilient.”‎

Outside the bank’s headquarters in Santa Clara, California, a ‎few anxious customers wondered how they could access their ‎money, and some tried to guess what was going on behind ‎closed glass doors.‎

As one customer, who did not wish to be named, said: “It is not ‎good. Many large capital owners have very high deposits in the ‎bank. As a junior manager, he used the bank to pay his ‎employees and worries about them

Market response:‎

The panic movement began in the markets, after the bank ‎announced that it was seeking to increase capital quickly to ‎keep pace with the huge withdrawals of its customers, without ‎success, and sold financial instruments for $ 21 billion (19.7 ‎billion euros), and lost $ 1.8 billion. (1.7 billion euros) in this ‎process. The announcement surprised investors and raised ‎concerns about the safety of the entire banking sector, ‎especially with the rapid rise in interest rates, which reduces ‎the value of bonds in their portfolios and increases the cost of ‎credit.‎

Its global impact:‎

The four largest US banks lost $52 billion (49 billion euros) on ‎the stock market on Thursday, and in the aftermath, Asian and ‎then European banks defaulted.‎

Outside the United States in Paris, Societe Generale, the ‎second largest French bank, lost 4.49%, BNP Paribas 3.82%, and ‎Credit Agricole 2.48%. Elsewhere in Europe, Germany’s ‎Deutsche Bank fell 7.35%, Britain’s Barclays Bank 4.09%, and ‎Swiss bank UBS 4.53%.‎

On Wall Street, the big banks recovered Friday from the ‎previous day’s defeat: JPMorgan Chase rose 2.54% while Bank ‎of America and Citigroup lost less than 1%.‎