Probably they did, with significant assistance from asleep-at-the-switch state regulators and incompetent bank management. The important takeaway from this bank failure is that repeated and rapid escalation of interest rates by the Fed over the past year to combat inflation had to eventually lead to something breaking! Most pundits have been hyper-focused on the end game being a recession. Maybe the bank failures are now enough to slow the economy without endangering it. We shall see.
One big problem was the Fed not stemming the run at SVB, another was the interest-rate risk. After this past year’s rate hikes, SVB’s portfolio losses were deep. This could have been avoided if the Fed had succeeded in doing its job as lender of last resort to SVB at the onset of the run. Now, a bailout of both insured and uninsured deposits has created the potential for financial instability.While weakening the bank regulations did not help, they were not the cause of the recent collapse.
Finance Finance Latest News, Finance Finance Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: CoinDesk - 🏆 291. / 63 Read more »