What caused Silicon Valley Bank to collapse in only 44 hours, and how likely will the contagion spread, leading to other bank failures?
Topics covered include:
- How losses on bonds blew up SVB's balance sheet
- How is Silicon Valley Bank similar and different than other regional banks
- What the FDIC and Federal Reserve are trying do to restore confidence and stop bank runs
- How a weakening of the Frank-Dodd bank regulation act set the stage for SVB's failure
- Why bailing out uninsured depositors is controversial
- Three scenarios of what might happen next
- Actions we can take to protect ourselves when private money fails
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Show Notes
Silicon Valley Bank launches $2.25bn share sale to shore up capital base by Joshua Franklin and Antoine Gara—The Financial Times
US Bank Capital Regulation: History and Changes Since the Financial Crisis by John Walter—Economic Quarterly
SVB's 44-Hour Collapse Was Rooted in Treasury Bets During the Pandemic by Brian Chappatta—Bloomberg
Remarks by FDIC Chairman Martin Gruenberg at the Institute of International Bankers—FDIC
How Silicon Valley Turned on Silicon Valley Bank by Ben Foldy, Rachel Louise Ensign, and Justin Baer—The Wall Street Journal
SEC Filings Details—Silicon Valley Bank
FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California—FDIC
Uninsured Silicon Valley Bank depositors seek fire sale of assets by Joshua Franklin, Sujeet Indap, Colby Smith, and George Hammond—The Financial Times
Join Statement by Treasury, Federal Reserve, and FDIC—Federal Reserve
FDIC Acts to Protect All Depositors of the former Silicon Bank, Santa Clara, California—FDIC
US regulators are setting a dangerous precedent on SVB by Sheila Bair—The Financial Times
Back-to-Back Bank Collapses Came After Deregulatory Push by David Enrich—The New York Times
Will another bank fall? by Robert Armstrong—The Financial Times
Shares in US regional banks close sharply lower over fears of deposit flight by Jennifer Hughes, James Fontanella-Khan, Ortenca Aliaj, and Brooke Masters—The Financial Times
Charles Schwab shares drop 12% even as the firm defends financial position by Yun Li—CNBC
Related Episodes
405: When Volatility Spikes, Financial Things Break
392: What Is Money and How to Use It
305: Are Banks Safe?
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