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Tuesday, Jun 03, 2025

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Regulators blame social media for SVB's rapid collapse: 'Complete game changer'

Silicon Valley Bank's (SIVB) stunning collapse has brought a new element to the conversation about what role management, regulators, and investors may have played in the bank's ultimate failure — the role of social media.
Silicon Valley Bank's stunning collapse has brought a new element to the conversation about what role management, regulators, and investors may have played in the bank's ultimate failure — the role of social media.

Regulators have suggested that social media may have played a key role in the recent demise of Silicon Valley Bank, in a classic run on the bank.

FDIC chair Martin Gruenberg stated that one clear takeaway from recent events is that heavy reliance on uninsured deposits creates liquidity risks that are extremely difficult to manage, particularly in today's environment.

However, he also noted that the bank's failure was exacerbated by social media platforms including Twitter, Slack and WhatsApp, on which panicked depositors spread the word.

Bank CEOs said that social media was a complete game changer, urging regulators to keep up with digital-first banking.
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