In the broader scope, SVB's collapse shows that financial management is necessary when times are good and bad. Jung saidduring a recessionary environment, companies need to take extra precautions with rising interest rates, supply chain issues and difficulties in raising capital. Is money safe in...
Of course, markets might still be digesting the shockwaves before selling off. But I suspect that hopes for lower rates as a result of SVB's collapse might be keeping markets afloat. It's a line of thinking shared by CNBC's Jim Cramer, who argued thatnothing is more deflationarythan the...
The root cause of the collapse of SVB was not stupidity at the bank, insufficient regulation, or corruption at the ratings agencies. The root cause is government interference in money and credit, especially including its irredeemable currency which necessarily inflicts interest rate instability upon th...
An ongoing review ofSVB’s collapseby the Federal Reserve is focusing on whether the central bank’s supervision was appropriate given SVB’s rapid growth and vulnerabilities. "While the Federal Reserve’s framework focuses on size thresholds, size is not always a good proxy for risk, p...
More broadly speaking, I think this charts an even murkier course for the Fed moving forward. The collapse of SVB is on everyone’s minds right now, so it seems natural that the Fed would move away from the faster rate increases that Powell signaled last week. All of that seems to be ...
The collapse of SVB was triggered by the realization of interest rate risk when its portfolio lost value as the Federal Reserve increased interest rates, leading to a rush of withdrawals and the ensuing bank run. This is different than the 2008 credit crisis that led to the collapse of the ...
SVB’s predicament is not unusual, although it’s not typically fatal. The bigger problem is that SVB’s collapse sappedconfidence in the banking system– and confidence is the key component undergirding the entire financial system. In the long run, banks will adjust to higher interest rates....
While the biggest banks like JPMorgan Chase and Bank of America are on more stable financial footing, Warner said it was still best to find a way to quickly mitigate the fallout of SVB's collapse. "I know I've been in conversations with the regulators, the administration...
In early 2023, everybody was talking about hard vs soft landing. SVB collapse changed the picture. Now we have no landing. The extravagant amount of liquidity pushes the system with an enormous thrust, so much that it does not allow any possibility of...
Following the collapse of SVB, investors were more motivated to move their uninsured deposits out of regional banks to protect their funds. The banks were also struggling with asset issues. During the COVID-19 pandemic, historically low interest rates led to banks amassing larger commercial and ...