Exploring the trade-offs of insuring bank deposits, the FDIC's role, and concerns of moral hazard, along with a case study on Silicon Valley Bank's failure due to investment strategy, shareholder losses, and debates on bank risk-taking.
Last year's banking crisis in Silicon Valley, where three banks including Silicon Valley Bank failed, caused bank runs and put pressure on other banks like Credit Suisse. This is reminiscent of past US banking disasters such as the Great Depression and the 2008 recession. Many economists predict that more banks around the world will face similar pressures, so what are the causes and potential consequences of these failures?
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