What Investors Need to Know About the Collapse of Silicon Valley Bank with Cullen Roche
Excess Returns
00:00
Should Banks Hedge Interest Rate Risk?
SBB failed because it didn't have a very diverse clientele, which is weird for a bank that large. I don't know if there's much they could have done to avoid what they inevitably ended up experiencing just because the deposit outflows were so big. It's hard to manage an outflow like that, regardless of, of what kind of bank you are. In general, it seems like banks have somewhat of an issue here in that they have these sort of low rate fixed mortgages on the asset side and can either not pay anything on the deposits or start paying market rates. There is this catch 22 for banks right now.
Transcript
Play full episode
