Research by 5 finance professors from the USA and Europe revealed that the social media platform Twitter fueled the escape from the bankrupt Silicon Valley Bank (SVB).
Release:
Anthony Cookson of the University of Colorado Boulder, Corbin Fox of James Madison University, Javier Gil-Bazo of Pompeu Fabra University, Juan Felipe Imbet of Paris Dauphine University, and Christoph Schiller of Arizona State University, “Escape from a Bank (Bank Run He published an article titled “Social Media as a Catalyst”.
“Social media fueled the escape from the SVB, and its effects were widely felt in the US banking industry,” the academic article in question states. it was said.
“SPEED THE ESCAPE”
In the article, which used extensive Twitter data, it was stated that social media strengthens the risk factors of bank breakout.
In the article, which stated that there was a high level of Twitter shares about the bank’s share losses during the bank run process, it was noted that this situation was stronger for banks with the risk factor of bank escape.
IT ALSO AFFECTED THE EXCHANGE
In the article, it was stated that the posts containing negative emotions during the escape period turned into stock market losses instantly.
Bankruptcy of the SVB
California-based SVB announced on March 8 that it would raise more than $2 billion in capital after closing its $21 billion bond position with a loss of approximately $1.8 billion.
SVB’s share price had lost more than 60 percent after it was heard in the market that the bank was stuck in liquidity. It was reported that $42 billion deposits were withdrawn from the SVB in just one day due to the panic.
ONE OF THE LARGEST BANK BANKS
The rapid collapse of the SVB forced banking regulators to take action, and the US Federal Deposit Insurance Corporation (FDIC) announced on March 10 that it had appointed a trustee to the SVB.
The panic caused by venture capitals while trying to overcome the liquidity crisis had dragged the 16th largest bank of the USA into one of the biggest bankruptcies in the country’s history within 48 hours. The bank’s bankruptcy was one of the largest since the 2008 global financial crisis. (AA)
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