Are More Bank Runs Coming? The Collapse of Silicon Valley Bank

Are More Bank Runs Coming? The Collapse of Silicon Valley Bank

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


For more information on this episode click here.

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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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