The claim: Silicon Valley Bank was the first ‘massive’ bank to fail this century
“An extinction-level event is upon us, according to Wall Street,” TV and podcast host Benny Johnson says in the clip. “The first massive bank collapse this century, ladies and gentlemen, is happening. Silicon Valley Bank seized by federal regulators after run on bank. You haven’t seen headlines like this since the 1920s.”
The post was shared more than 100 times in three days. The clip shared on Facebook comes from a video originally posted to Johnson’s YouTube channel on March 11.
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Our rating: False
Hundreds of banks have failed in the 21st century, and this latest failure isn’t the largest. Washington Mutual Bank’s 2008 failure was larger, in terms of assets, than the Silicon Valley Bank collapse.
Washington Mutual Bank had more assets when it failed in 2008
Silicon Valley Bank and its $209 billion in assets collapsed on March 10 following a run on the bank, USA TODAY reported. But contrary to the Facebook video’s claim, the failure was not the first or the largest of this century.
The largest bank failure in U.S. history occurred in 2008 when Washington Mutual Bank and its roughly $309 billion in assets collapsed during the height of the Great Recession, according to The Washington Post.
Brian Marks, executive director of the Entrepreneurship & Innovation Program at the University of New Haven, said the Washington Mutual collapse was part of a broader financial crisis.
“This situation is different from 2008,” Marks said. “That was a widespread financial failure in the banking system.”
Since Johnson recorded his video, Signature Bank failed and lenders rescued First Republic Bank. Still, the roughly $319 billion in total assets held by the two failed banks in 2023 fall short of the roughly $374 billion in assets held by the banks that failed in 2008.
USA TODAY reached out to Johnson and the social media user who shared his video for comment.
Lead Stories also debunked the claim.
Our fact-check sources:
- Brian Marks, March 15, Phone interview with USA TODAY
- FDIC, updated Dec. 3, 2019, Bank Failures in Brief – 2008
- FDIC, accessed March 17, Failed Bank List
- USA TODAY, March 10, Silicon Valley Bank assets seized by FDIC in largest bank failure since 2008
- USA TODAY, March 12, Silicon Valley Bank: Regulators offer plan to ‘ensure U.S. banking system continues to perform its vital roles’
- USA TODAY, March 13, Ripple effect: How Silicon Valley Bank collapse is affecting other US banks
- Washington Post, March 11, Before Silicon Valley Bank failure, there was Washington Mutual
- CNN, March 17, Global markets rebound after US lenders rescue First Republic Bank
- Bankrate, March 14, The 6 largest bank failures in US history
- Lead Stories, March 14, Fact Check: Silicon Valley Bank Failure NOT ‘First Massive Bank Collapse This Century’
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