To understand this situation, We need to first understand how banks work. From the perspective of an individual, Bank is the place where we keep our hard-earned money We deposit our money with the banks for safekeeping. But from the perspective of a bank, The bank is running a business. They won’t work for you for free. Banks have a distinct business model.
The money deposited by you with the banks, Banks would want to use it to make money for themselves. There can be different ways of making money. For example, giving loans to other companies and individuals. The interest charged on that loan would be the profit for the bank. The second source of income is investing in various places. Banks invest the money deposited with them in the stock market, government bonds or for buying gold for example.
Similar to how individuals invest their money at various places. Banks can do the same to earn more money. Coming to the Silicon Valley Bank (SVB), it was established in 1983. Its headquarters are located in Santa Carla, California.
