Repercussions of the Silicon Valley Bank collapse on global stock markets

Abstract

We employ an event study method to examine the impacts of the collapse of a prominent tech industry bank, Silicon Valley Bank (SVB), on global stock markets. The collapse triggered panic and uncertainty, leading to significant negative returns worldwide. The magnitude of the impact was more pronounced within developed markets due to the higher level of integration and interdependence with the global economy, where we find significantly high abnormal volatility. Further, the impact of the SVB collapse was not uniform across all countries, and those with robust banking system development and stability were impacted differently.