Silicon Valley Bank failure: What is FDIC insurance and how does it work?

The recent failure of Silicon Valley Bank was shocking: The institution, which was a banking hub for tech startups, was thought to be strong until just a few days before its collapse. It was also the first bank failure since 2020, as well as the most dramatic failure since the 2008 financial crisis. Silicon Valley Bank had almost 500 times more assets — $209 billion total — than all of the banks that failed in 2020 combined. While the speed and severity of the collapse were surprising, the Federal Deposit Insurance Corporation (FDIC) stepped in right away to protect depositors at both Silicon Valley Bank, as well as Signature Bank in New York, which failed days later.