Final answer:
A bank can be seized by regulators if its liabilities exceed its assets, leading to a potential bank run. The specific risks impacting Silicon Valley Bank are not detailed in the provided resources, but typically include credit, market, and operational risk. The historical context explains the regulatory measures like the FDIC and SEC established to prevent such occurrences.
Step-by-step explanation:
The bank may be 'seized' by federal regulators if it's found that its net worth has become negative, meaning the bank's assets are not enough to cover its liabilities. This situation can trigger a bank run, which occurs when a large number of depositors withdraw their funds simultaneously over concerns about the bank's solvency, thus exacerbating the bank's financial situation even further. Critics have questioned why federal regulators did not anticipate the financial instability of banks before the recession of 2008-2009. In the case of Silicon Valley Bank, while not mentioned in the provided information, this issue would likely relate to the broader problem of financial instability that might have been exacerbated by a variety of risk factors.
Regarding Silicon Valley Bank and the three risks discussed in the mentioned chapter, without specific details of the risks identified in Chapter 12, it's not possible to definitively say which risk impacted the bank the most. Typically, the risks faced by a bank could include credit risk, market risk, and operational risk. Given the historical context of bank runs and regulatory oversight failures, it could be speculated that one or more of these risks contributed to the bank's issues leading to it being seized by federal regulators.
For banks like Silicon Valley Bank, understanding and managing these risks is essential to maintaining solvency and thus public trust and confidence in the banking system. The creation of the FDIC and SEC, as mentioned in the historical context, was designed to prevent such occurrences by providing a safety net for depositors and overseeing financial transactions.