Silicon Valley Bank (SVB) has been ordered to close by the California Department of Financial Protection and Innovation, with the FDIC appointed as the receiver to safeguard insured deposits. In response to a capital raise to shore up its balance sheet, SVB experienced a 60% drop in share value and lost over $80 billion in value from bank shares.

The $1.75 billion share sale was launched to cover a $1.8 billion deficit from the sale of a loss-making bond portfolio primarily consisting of US Treasuries, yielding a lower return than the current 10-year Treasury yield. Despite concerns from investors about the bank’s ability to withstand the deteriorating fortunes of many technology start-ups, the closure has come as a surprise, given that before its closure, SVB was the 16th largest bank in the United States, with 17 branches across California and Massachusetts and assets worth $209 billion and deposits of $175.4 billion. The FDIC has established the Deposit Insurance National Bank of Santa Clara to manage SVB’s insured deposits.