A clearheaded explanation.
vox.com/culture CULTURE As a person of millennial experience, there are few things more chill-inducing to me than the financial collapse of 2008. The scariest part was that no one, whether they wanted to or not, would explain in plain English why the bottom fell out. All this bad stuff was happening around us, and people just kept repeating banking jargon. So last week, when the collapse and takeover of [Silicon Valley Bank]( was announced, the first question that came to my mind was whether this was 2008 all over again. How scared should we all be? Was it a bailout? Was it bad??? Thankfully, my colleague Emily Stewart [has been breaking down]( whatâs happening, with a lens toward 2008. The financial chaos is still unfolding, but as she explains, this isnât the same bailout situation from 15 years ago. (Not yet, anyhow!) â[Alex Abad-Santos](, senior correspondent Is this a bailout? [Two figures emptying a large piggy bank]( Getty Images The whisper of the word âbailoutâ is enough to send a shiver down anyoneâs spine. For most, it evokes specific and evocative memories of the 2008 global financial crisis, when the United States government [stepped in]( to keep flailing financial institutions afloat using taxpayer money. In the popular imagination, it persists as an example of capitalistic governance at its worst: The big banks took big risks, and everybody else paid for it. Now, in the wake of [Silicon Valley Bankâs implosion]( and the governmentâs [announcement]( that it will step in to return money to depositors and shore up the [US banking system]( once again, the term bailout is here once again. But is that whatâs really happening here? The long and short of it is that itâs complicated, but basically, kind of yes, though this isnât a 2008 redux. To back up a little bit in case youâre not up to speed, over the past several days, a handful of US banks have been in disarray. (You could check out Voxâs answers to nine questions you might have about the debacle [here](.) [Silicon Valley Bank](, or SVB, a bank that largely catered to the tech sector, startups, and venture capital, went under last week. The bank announced it was in the midst of a cash crunch on Wednesday, March 8, and by Friday, March 10, regulators shuttered it and the FDIC took it over. Heading into the weekend, there was a bunch of speculation about what would happen with SVB specifically. It had a lot of important clients (including Vox Media, which owns Vox.com), and while many depositors were able to pull their money out before it collapsed, not everyone could. There were [concerns]( companies wouldnât, for example, be able to make payroll with their funds caught up in SVB. [Read the full story »](
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