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Are you confused about the Silicon Valley Bank failure, but you’ve waited too long to ask someone about it? This quiz is for you.

The Bank Failures Are Confusing. This Quiz Explains What’s Happening For Beginners.

Understanding The Bank Failures For Beginners

A Recap Of The Last Week Of Banking Chaos

Oh, it's true, all right. Silicon Valley Bank's collapse is the [largest bank failure since the 2008 global market crash](https://apnews.com/article/banks-federal-reserve-silicon-valley-lending-rescue-a04875a164165b50e971ff4576bf4e27), and the second-largest bank failure in US history.  
  
  
Why did SVB fail? "On Wednesday, March 8, SVB’s parent company, SVB Financial Group, said it would undertake a $2.25 billion share sale after selling $21 billion of securities from its portfolio at a nearly $2 billion loss," [Vox's Emily Stewart reports](https://www.vox.com/technology/23634433/silicon-valley-bank-collapse-silvergate-first-republic-fdic). "The move was meant to shore up its balance sheet. Instead, it spooked markets and clients." Investors began pulling their money out from SVB in quick succession, and by Friday, the bank went under. Signature Bank, which catered mainly to crypto clients, abruptly shut down for similar reasons.

**True**

In the last week, Silicon Valley Bank and Signature Bank in New York were shut down by government regulators.

The Biden administration announced that SVB and Signature customers will be able to access all the money they deposited in the bank, even if it was uninsured, CNN reports. It's a [dramatic move intended to mitigate widespread damage](https://www.cnn.com/2023/03/12/investing/svb-customer-bailout/index.html) caused by the banks' collapses — such as companies running out of money to pay their employees.  
  
  
In addition, the Federal Reserve will [roll out an emergency lending program](https://apnews.com/article/banks-federal-reserve-silicon-valley-lending-rescue-a04875a164165b50e971ff4576bf4e27), which allows banks to borrow money from the Fed to offset damage from sudden, potentially damaging customer withdrawals.

**False**

Because these banks failed, all the money they were holding is gone.

Although bank stocks across the US dipped Monday, there was an overall [bounce back in stocks](https://www.nytimes.com/2023/03/14/business/regional-bank-stocks-rebound-offering-a-pause-in-the-panic-about-the-financial-system.html) on Tuesday — subduing fears of a market crash of 2008 proportions.  
  
  
As [FiveThirtyEight political reporter Monica Potts put it](https://fivethirtyeight.com/features/the-silicon-valley-bank-collapse/), the federal government stepping in so quickly "has more to do with vibes than anything. When people hear a bank is failing, they get nervous about their deposits and nervous about investing in banks, whether or not their situations are remotely similar to Silicon Valley Bank. That was Biden’s first message on Monday: The banking system is safe."

The Biden administration swooped in to protect bank deposits because the entire banking system is in jeopardy.

Your personal finances are probably going to be just fine.  
  
  
The Federal Deposit Insurance Corporation (FDIC) [insures up to $250,000](https://www.washingtonpost.com/business/2023/03/10/faq-fdic-insurance/) in bank deposits. Furthermore, the Biden administration has assured SVB and Signature Bank customers that it will guarantee 100% of their deposits, even if they exceeded $250,000.

I'm probably going to lose my life savings because of this ridiculous tech bank I didn't know about until this week.

The Biden administration has assured Americans that no taxpayer dollars will be used to protect the bank deposits (unlike in the 2008 recession), and it has been making a point to [not call this a bailout](https://www.nytimes.com/2023/03/14/us/politics/bailout-biden-financial-crisis.html). Still, it's an example of the federal government stepping in to protect depositors — many of whom were tech startup leaders taking risks for company growth. Biden's political opponents are [already labeling the move](https://www.nytimes.com/2023/03/14/us/politics/bailout-biden-financial-crisis.html) a bailout, the New York Times reports, though there are [marked differences](https://www.vox.com/money/2023/3/13/23638417/svb-bank-bailout-signature-fed-fdic-treasury-janet-yellen) between this intervention and the bailouts of 2008.

This whole thing is sort of a bailout, but without using taxpayer money.

I wish! There are still a number of unknowns ahead in this whole bank debacle. The Justice Department and the Securities and Exchange Commission are [investigating the collapse](https://www.washingtonpost.com/business/2023/03/14/justice-dept-investigating-silicon-valley-bank-collapse/) of SVB, the US bank issues [may be trickling out to European markets](https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-is-fueling-a-broader-rout-in-european-bank-stocks), and it remains to be seen whether the Biden administration's move to protect depositors will [fuel Republicans' criticisms](https://www.nytimes.com/2023/03/14/us/politics/bailout-biden-financial-crisis.html) against the president ahead of the 2024 election.

My money will be fine, banks are stabilizing, I can stop caring about these banking failures.

But hey, now you know more than you did before!

You got zero out of six questions correct.

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The Bank Failures Are Confusing. This Quiz Explains What’s Happening For Beginners.

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