The Limits of Bank Capital

I think there is a limit to what bank capital can protect a bank. If you, if you land long and borrow short, of course, there's always risks. And the best thing a bank can do and which many banks do successfully is to manage these risk. The case of Silicon Valley is probably exceptional. That's sad. It doesn't mean that it won't happen to other banks. In my case,what I learned from that is that bank runs even with high capital are possible. But also you have to be aware of the fact that in this case, governance and operational risk played an important role.

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