US regulators have shut down Silicon Valley Bank and taken control of its customers’ deposits in the largest failure of a US bank since 2008.

The moves came as the firm, a key tech lender, was scrambling to raise money to plug a loss from the sale of assets affected by higher interest rates.

Its troubles prompted a rush of customer withdrawals and sparked fears about the state of the banking sector.

The Federal Deposit Insurance Corporation said it had taken charge of the roughly $175 billion in deposits held at the bank, the 16th largest in the US.

Concerns that other banks could face similar problems led to widespread selling of bank shares globally since Thursday.