California-based SVB Financial Group, a start-up focused lender, has been closed by regulators, making it the largest bank failure since the financial crisis.

The decision follows the resignation of CEO Greg Becker due to personal reasons.

The regulators appointed the Federal Deposit Insurance Corporation, FDIC, as a receiver to dispose of its assets.

This unexpected move has prompted the global banking sector to shed billions in market value, wiping out over 80 billion dollars in value from bank shares. The bank's collapse shows how raising interest rates have exposed vulnerabilities in the market.

Short sellers in SVB have profited by 717 million dollars since Wednesday’s close.