Financial equities are being affected by the share price decline at Silicon Valley Bank.

On Thursday, investors started to remove their deposits, which caused shares of Silicon Valley Bank (SVB), a significant lender to technological start-ups, to plunge.

The decline occurred the day after the bank disclosed a $2.25 billion (£1.9 billion) share sale to help strengthen its finances.

Bank stock prices have dropped globally, with the four biggest US banks, including JP Morgan and Wells Fargo, losing more than $50 billion in market value.

With a more than 60% drop in price and an additional 20% loss in after-hours trading, SVB shares saw their largest one-day decline ever.

The company began the share sale after suffering a $1.8 billion loss when it sold a portfolio of assets, including US Treasury bonds.  For the bank, however, the advice to withdraw money from those start-ups who have had money placed is more worrisome.

This situation is “crazy,” according to Hannah Chelkowski, founder of Blank Ventures, a fund that invests in financial technologies.

SVB, an essential early-stage lender, is the banking partner for roughly half of US venture-backed technology and healthcare companies that went public last year. The price of the bonds that banks held was a topic of concern in the larger market since those bonds lost value as rates of interest increased.

Interest rates have grown dramatically as central banks around the world, particularly the US Federal Reserve and the Bank of England, work to reduce inflation.

Due to their propensity to maintain sizable bond portfolios, banks often carry a sizable amount of prospective losses. A problem won’t arise if banks aren’t forced to sell their bonds due to value declines in their holdings.

Lenders’ profits can be impacted if they are forced, like Silicon Valley Bank, to sell the bonds they own at a loss.

Banks are suffering as a result of the increase in interest rates, according to Ray Wang, founder and CEO of Silicon Valley-based consultancy Constellation Research.

“In many areas, including Silicon Valley Bank, no one anticipated that these interest rate increases would persist this long. That’s what I believe actually occurred. They made a mistaken wager. “He continued.