Odd Lots

Dan Davies On What Brought Down Silicon Valley Bank

Mar 14, 2023

In this discussion, Dan Davies, a Managing Director at Frontline Associates and former Bank of England economist, delves into the shocking collapse of Silicon Valley Bank. He reveals how the bank's tech-heavy customer base was more volatile than anticipated and why their risky investments in long-dated Treasuries backfired. Davies also highlights critical failings in risk management and regulatory gaps that accelerated the downfall, leaving the banking sector to brace for future challenges and uncertainty.

33:13

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Episode guests

Dan Davies

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Episode notes

Intro

4min

Insights into the Dynamics of Silicon Valley Bank's Business Model

3min

Examining Risk Management Failures at Silicon Valley Bank

4min

Banking Downfall: Missteps and Regulatory Gaps

10min

Understanding Deposit Safety and Bank Liquidity in Crisis

4min

The Collapse of Silicon Valley Bank

11min

Engaging Financial Opportunities and Upcoming Events

2min

Silicon Valley bank collapsed at record speed. And the world is still trying to figure out what went wrong? How did a bank with a strong history, a strong brand, and a fairly conservative investment portfolio go belly up so fast? On this episode of the podcast, we speak with Dan Davies, a Managing Director of Frontline Associates, who previously worked as a bank analyst. He explains why the bank's customer base turned out to be so much more flighty than expected, and why the bank reached for yield buying long-dated Treasuries at a time of ultra-low interest rates. We discuss what to watch next, and why he's concerned that the initial salvo to stanch the bank run may not be enough.

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