Silicon Valley Bank shut down by regulators; assets seized

Silicon Valley Bank shut down by regulators; assets seized

• Silicon Valley Bank, the US 16th-largest bank, failed after depositors hurried to withdraw money this week amid anxiety over the bank’s health
• Regulators rushed to seize the assets of one of Silicon Valley's top banks, marking the largest failure of a U.S. financial institution since the height of the financial crisis almost 15 years ago.
• It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008.
• The bank served mostly technology workers and venture capital-backed companies, including some of the industry's best-known brands.
• “This is an extinction-level event for startups,” said Garry Tan, CEO of Y Combinator, a startup incubator that launched Airbnb, DoorDash and Dropbox and has referred hundreds of entrepreneurs to the bank.
• There appeared to be little chance of the chaos spreading in the broader banking sector, as it did in the months leading up to the Great Recession. The biggest banks — those most likely to cause an economic meltdown — have healthy balance sheets and plenty of capital.
• Nearly half of the U.S. technology and healthcare companies that went public last year after getting early funding from venture capital firms were Silicon Valley Bank customers, according to the bank’s website.
• The bank also boasted of its connections to leading tech companies such as Shopify, ZipRecruiter and one of the top venture capital firms, Andreesson Horowitz.
• Tan estimated that nearly one-third of Y Combinator’s startups will not be able to make payroll at some point in the next month if they cannot access their money.
• Internet TV provider Roku was among casualties of the bank collapse. It said in a regulatory filing that about 26% of its cash — $487 million — was deposited at Silicon Valley Bank.

China helps Saudi Arabia in the peace talk, Iran reconciles.

• Regional rivals Iran and Saudi Arabia agreed to restore ties and reopen diplomatic missions in Chinese-brokered talks, they said in a joint statement, seven years after relations were severed.
• The move caps a broader realignment and efforts to ease tensions in West Asia.
• Story so far.
• Riyadh cut ties with Tehran after Iranian protesters attacked Saudi diplomatic missions in the Islamic republic in 2016 following the Saudi execution of Shia cleric Nimr al-Nimr.
• Shia-majority Iran and Sunni Muslim Saudi Arabia support rival sides in several conflict zones across West Asia, including in Yemen where the Houthi rebels are backed by Tehran, and Riyadh leads a military coalition supporting the government.
• “Following talks, the Islamic Republic of Iran and the Kingdom of Saudi Arabia have agreed to resume diplomatic relations and reopen embassies and missions within two months,” Iran’s state news agency IRNA said, citing the joint statement.
• The official Saudi Press Agency also published the statement, which said talks took place in Beijing for five days immediately before the announcement.
• Ali Shamkhani, the secretary of Iran’s Supreme National Security Council, had travelled to Beijing for “intensive negotiations with his Saudi counterpart in China in order to finally resolve the problems between Tehran and Riyadh”, IRNA said.
• Iraq, a neighbour to both countries, had hosted several rounds of talks between Iran and Saudi Arabia since April 2021.
• Those encounters were held at a relatively low level, involving security and intelligence officials.
• Iran’s Foreign Minister Hossein Amir-Abdollahian had said in July that the two countries were ready to move talks to a higher level, in the political and public spheres.
• In a statement, Iran and Saudi Arabia said they “thank the Republic of Iraq and the Sultanate of Oman for hosting the talks held between the two sides in 2021 and 2022 as well as the leaders and government of the People’s Republic of China for hosting and supporting the talks held in that country”.
• “The three countries expressed their keenness to exert all efforts towards enhancing regional and international peace and security,”