Silicon Valley Bank: a very modern bank run
More or Less: Behind the Stats
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How Silicon Valley Bank Made Money
In just a couple of days, its customers withdrew about $42 billion and the bank had to be taken over by the federal government. But why did confidence in the banks all suddenly and dramatically collapse? To understand that, we have to look at how the bank was trying to make money. Interest rates were ultra low, making it hard to make money through the old strategy of charging a higher rate for your loans than you did for your deposits. So Silicon Valley Bank had to try something else.
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