Analyzing the Financial Catastrophe of Silicon Valley Bank and its Influence on Indian Start-ups and the Indian Stock Market

Abstract

The paper explores the financial disaster of Silicon Valley Bank and its consequences for Indian start-ups and the Indian stock market. The study uses secondary data from 2018–2022 to analyse the bankruptcy of Silicon Valley Bank, analysing the relationship between interest revenue and non-interest revenue on the net profit of SVB and studying the impact of the collapse on Indian start-ups and the Indian stock market through regression analysis and existing literature, respectively. The findings suggest that 2018, 2019, and 2021 indicate a moderate risk of bankruptcy and a low likelihood of bankruptcy in 2020; however, 2022 provides a clear indication of bankruptcy. The paper also suggests that non-interest revenue significantly influenced or had an optimistic effect on Silicon Valley Bank's net profits, while interest income has not significantly influenced or positively impacted Silicon Valley Bank's net profits. The paper also finds that the Silicon Valley Bank crisis, primarily affecting the US, may not have the same profound impact as the 2008 Lehman Brothers crisis, which caused a global recession, and may have fewer repercussions in India due to unfavourable public opinion.

Keywords: The Silicon Valley Bank Collapse, Indian start-ups, Indian Stock Market,

DOI: 10.7176/RJFA/15-1-02

Publication date: January 31^st 2024