Why Silicon Valley Bank collapsed: In Q&A, Khanna talks origins of financial implosion

CONGRESSMAN RO KHANNA led efforts to ensure depositors of Silicon Valley Bank could withdraw their funds following the largest collapse of a U.S. financial institution since the 2008 mortgage meltdown.

The Federal Deposit Insurance Corporation (FDIC) took control of Silicon Valley Bank on March 10 after uncertainty about its solvency led to a run on the bank, as customers withdrew funds faster than the bank could keep up. Days later, after pressure from Khanna and other lawmakers, the Federal Reserve Board said it would protect all depositors at Silicon Valley Bank, and New York-based Signature Bank, which was shut down March 12, making sure customers would have access to all their funds beyond the $250,000 insured by the FDIC. The uncertainty had dozens of depositors lining up at the bank last Monday morning to pull their money.