--- title: Study Finds Twitter Chatter Fueled SVB Collapse — and Other Banks Are at Risk description: New research suggests that tweets helped spur the bank run on Silicon Valley Bank that led to its collapse — and other banks are at risk. authors: - name: Sarah Hansen role: Senior Writer url: https://money.com/author/sarah-hansen/ bio: Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes. education: Northwestern University, New York University at_money_since: 2021 articles: 347 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://www.linkedin.com/in/sarah-m-hansen/ former_staff: true editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2023-04-21T18:22:40.000Z' modified: '2024-01-10T17:54:20.000Z' section: Banking tags: - News word_count: 525 canonical: https://money.com/twitter-svb-collapse-study/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Hand holding a phone with notification bubbles popping up](https://img.money.com/2023/04/News-Bankrun-sns.jpg) Is it possible that conversation on Twitter helped spur the [run on Silicon Valley Bank](https://money.com/bank-failures-explained-questions-answers/) (abbreviated SVB) that led to its collapse? That’s the premise of a new [working paper](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4422754&campaign_id=4&emc=edit_dk_20230421&instance_id=90726&nl=dealbook®i_id=177004868&segment_id=130996&te=1&user_id=30477d4d1869cf63cd11b071daaa2ae3) from a group of economists who analyzed data from Twitter and bank stocks — and ultimately discovered that social media chatter did indeed amplify the risk. As [rising interest rates](https://money.com/fed-interest-rate-hike-march-2023/) and a tough economic climate prompted many of SVB's startup and tech industry customers to withdraw their deposits, the bank was forced to sell investments at a huge loss to cover demand. Word of those losses traveled quickly, and spooked depositors withdrew $42 billion from the bank in just 24 hours, [according to Reuters](https://www.reuters.com/business/finance/social-media-driven-bank-runs-burden-regulators-with-bigger-problem-2023-03-21/). Many blamed the speed and intensity of online chatter about SVB’s weakness for the bank’s swift demise. The five researchers, who are affiliated with universities in the United States, Spain and France, also found that negative tweets during the March run on SVB preceded declines in bank share prices on the stock market. And given the fact that nearly everyone uses social media these days, it's likely not a contained issue. “Our analysis suggests that other banks face similar risks,” the researchers wrote. In the immediate aftermath of [SVB’s collapse](https://money.com/svb-collapse-what-it-means/) last month, the crisis quickly earned the accolade of “the first Twitter-driven bank run.” Other recent bank runs, like those during the last financial crisis, took place just as social media was getting started (Twitter was founded in 2006, only two years before the implosion of Washington Mutual and Wachovia). But SVB was different because many depositors were involved in the venture capital industry, had strong networks with others in the industry — especially tech founders — and were very active on the now-very-well-established Twitter. That created a perfect storm "unique to the social media era," the researchers wrote. “Discussion amplifies risk,” the paper's lead author, J. Anthony Cookson, an associate professor of finance at the University of Colorado at Boulder, [told the *New York Times*](https://www.nytimes.com/2023/04/21/business/dealbook/buzzfeed-news-shuts-down.html). Basically: Social media allowed SVB’s customers to communicate with each other extremely quickly, and that lightning-fast online discussion compounded the damage. ## Are other banks at risk? Social media isn’t going anywhere, and neither is its influence on the financial world. Just look at the short squeeze on GameStop [orchestrated by r/WallStreetBets](https://money.com/reddit-wallstreetbets-stock-gamestop/) in 2021. More banks could be susceptible to the same phenomenon, the researchers conclude. They say that’s especially concerning because of how easily inaccurate information can spread online: “Given the increasingly pervasive nature of social communication on and off Twitter, we do not expect this risk to go away,” they wrote. Thankfully, most consumers don’t need to worry about whether their deposits are safe, even in the social media age. The Federal Deposit Insurance Corporation (FDIC) [insures bank deposits](https://money.com/are-bank-deposits-fdic-insured/) up to $250,000 per account type, per depositor, and it expanded that coverage for depositors affected by the SVB collapse. [Are Your Bank Deposits Covered by FDIC Insurance? Here's How to Know](https://money.com/are-bank-deposits-fdic-insured/) [Bank Failures Explained: Answers to 6 Big Questions About What Happened and What's Next](https://money.com/bank-failures-explained-questions-answers/) [Most Americans Still Trust Banks Despite Recent Collapses](https://money.com/americans-still-trust-banks-despite-collapses/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/twitter-svb-collapse-study/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Banking", "item": "https://money.com/banking/" }, { "@type": "ListItem", "position": 3, "name": "Banks", "item": "https://money.com/banks/" }, { "@type": "ListItem", "position": 4, "name": "Study Finds Twitter Chatter Fueled SVB Collapse — and Other Banks Are at Risk" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/twitter-svb-collapse-study/#webpage", "url": "https://money.com/twitter-svb-collapse-study/", "name": "Study Finds Twitter Chatter Fueled SVB Collapse — and Other Banks Are at Risk", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-04-21T18:22:40.000Z", "mainEntity": { "@id": "https://money.com/twitter-svb-collapse-study/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/twitter-svb-collapse-study/#breadcrumb" }, "dateModified": "2024-01-10T17:54:20.000Z" }, { "@type": "NewsArticle", "headline": "Study Finds Twitter Chatter Fueled SVB Collapse — and Other Banks Are at Risk", "articleSection": "Banking", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/04/News-Bankrun-sns.jpg", "width": 2880, "height": 1920, "caption": "News-Bankrun-sns" } ], "author": [ { "@type": "Person", "name": "Sarah Hansen", "url": "https://money.com/author/sarah-hansen/", "@id": "https://money.com/author/sarah-hansen/#author", "description": "Sarah Hansen is a senior writer at Money covering all things personal finance. 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