The collapse of Silicon Valley Bank.

The second biggest bank collapse in US history.

The Silicon Valley Bank collapsed on March 10th, after a run-on deposit doomed the tech-focused lender's plans to raise fresh capital.

This prompted US regulators to step in with emergency measures, including seizing another bank three days later,

in a bid to ease fears that depositors might pull their money from other lenders.

WSJ banking reporter Rachel Ensign explains how this crisis unfolded and what could happen next.

During the pandemic, Silicon Valley Bank had gotten all of these deposits; their deposits tripled.

It was a huge, huge, huge influx.

And they did what banks do⏤they took some of their deposits and made loans.

But they also invested a lot of them in securities, which are pretty safe.

Some issues had been bubbling under the surface at Silicon Valley Bank since the Federal Reserve started raising rates.

When rates rose, the bonds fell in value.

It's not a big problem for you, unless you have to go and sell the bonds.

But deposits started leaving the bank faster than they anticipated, and they had to sell their bonds and take a very big loss.

The bank made an announcement on Wednesday night that it needed to raise capital and was planning to do that the next day.

The investors completely freaked out, sold off the stock, and then, a bank round started,

where people tried to withdraw 42 billion dollars in deposits just in that one day.

And by Friday morning, it was seized by regulators.

The regulators have responded in a way that they're hoping stems the panic.

The Fed said, "We're going to be offering this lending facility that's a backstop."

"We're gonna be ensuring all of the deposits, effectively, of this bank that failed."

The collapse matters because it could have broader economic effects.

There was the risk that this panic would spread to other parts of the banking system.

We saw some really significant news with some other banks that investors were most concerned about last week.

Most notable, Signature Bank, a New York-based bank was also seized on Sunday night.

It is the third largest bank failure in US history.

And First Republic put out a statement saying they've gotten some extra money from the Federal Reserve and, also, from J.P. Morgan.

They're hoping that that reassures their investors and their depositors.

The key thing to watch for is: Is the panic over?

That's the big question.

Do people stop pulling their money out?

Do investors and customers, kind of⏤are they reassured in the way that the government would like them to be?