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Ep23 “When Banking Fails” with Amit Seru

All Else Equal: Making Better Decisions

00:00

The Impact of Interest Rates on the Asset Side

Silicon Valley Bank had a huge inflow of deposits about $140 billion in the last year and a half. But interest rates have risen by 3%. That event itself was enough to force Silicon Valley Bank to liquidate some of these securities whose value had fallen. Once they woke up, the bank now is forced to sell even more securities because that's the only way they can pay it back.

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