There is an underestimated and not directly seen dimension in recent SVB bank collapse - it could be directly triggered by social media. The 'classic' scenario is based on a hypothetical situation where a rumor spreads on social media that a major bank is in financial trouble and may not be able to honor withdrawals. This rumor could lead to a panic among depositors, who rush to withdraw their money from the bank.

However, now we see that such a scenario is not entirely far-fetched, as social media has become a powerful tool for spreading information, both true and false. In the past, there have been multiple instances where false rumors on social media have caused panic and chaos, such as the recent case of the false missile alert in Hawaii.

Series of tweets by several high-profile investors last week (March 9+) seems like led to classical viral bank run, which actually included the collapse of the SVB, as well as a ripple effect on other banks and the broader economy. Regularily, banks hold only a fraction of their deposits in reserve, and rely on the confidence of depositors to function. A sudden withdrawal of funds could cause a liquidity crisis, making it difficult for the bank to meet its obligations. $41 billion was withdrewn from SVB in one day and that was enough for bank to fail. We all will see long-lasting ripple effects on IT/Tech industry, startups and banks and partially we should say thank you for this to tweet )

Both regulators and banks need to be prepared for such a scenario, by having contingency plans in place, such as providing reassurance to depositors, increasing liquidity buffers, and having access to emergency funding. And this is global - do not expect that only US/Silicon Valley banks are at risk

What's in that for SMB's?

The collapse of a bank can have far-reaching consequences for small businesses. Many small businesses rely on banks for loans, lines of credit, and other financial services. If a bank fails, it can lead to a shortage of credit and other financial services, making it more difficult for small businesses to obtain the financing they need to grow and expand.

In addition, the collapse of a bank can lead to a loss of confidence in the banking system as a whole. This can lead to a decrease in lending and investment, which can have a negative impact on the economy as a whole.

To mitigate the impact of bank failures on small businesses, it is important for small business owners to diversify their sources of financing. This can include seeking out alternative lenders, such as online lenders or peer-to-peer lending platforms. It is also important for small business owners to maintain strong relationships with their banks and to stay informed about the financial health of their banks.

A small checklist of measures could be taken to ensure stability in complicated times:

1. Increase efficiency by streamlining processes and automating tasks where possible.
2. Focus on high-priority projects that generate revenue and cut back on low-priority projects.
3. Develop new marketing \ sales channels, work in internal efficiciency on bith sales and processes' sides
4. Diversify the client base to reduce dependency on a single client or industry.
5. Reduce overhead costs by cutting back on non-essential expenses such as travel, office supplies, and marketing campaigns.
6. Review and renegotiate contracts with vendors and suppliers to get better deals and reduce expenses.
7. Offer flexible payment terms to clients to encourage prompt payment and improve cash flow.
8. Explore alternative sources of funding such as government grants, loans, or equity investment.
9. Consider outsourcing non-core functions such as accounting or HR to reduce costs.
10. Develop a contingency plan to prepare for potential future crises and minimize their impact on the business.

In conclusion, the collapse of a US bank highlights the need for stronger regulation and oversight of the banking system. This is good lesson that amplifies importance of risks management, being agile and always having a plan B and C.