Fed fueled the banking turmoil and should've known better: Carson Block

have plummeted in recent weeks, as markets reeled after the collapse of SVB, Signature, and Silvergate Capital earlier in March.the Fed raised interest rates from near-zero to around 5% in the space of a year

to fight inflation. That has driven stocks and bonds to plummet, which fueled the implosion of high-profile companies like FTX and SVB. The central bank's aggressive hikes followed more than a decade of low borrowing costs in the aftermath of the financial crisis. That encouraged lenders to take unnecessary risks and enabled them to use leverage to hide problems on their balance sheets, according to Block."Obviously what's happened is you've had the Fed hiking interest rates quite quickly and you've had a lack of risk management by many of these banks.

"What I think this speaks to — and this has been the bane of short-sellers since the financial crisis — is all of the leverage that has been created and all the money that's been pumped into financial markets in order to just keep the system going," Block added.

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