SVB’s Valley of Death

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The implosion of SVB is a film we’ve seen before—and recently, too, with FTX—but that doesn’t make it any less wrenching. While regulators decide next steps, and the bank’s customers wait with bated breath, a few early observations about how this happened again, and what might be coming next.

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SVB’s Valley of Death

Assessing the reality of an historic 48 hours on Wall Street.

WILLIAM D. COHAN

When you combine a confidence game, fractional banking, and idiotic risk management with the Federal Reserve’s 13-year zero-interest rate policy regime, you get what we saw in recent days with Silicon Valley Bank. SVB can now be added to the list of infamous bank failures over the years, including Washington Mutual, IndyMac, Bear Stearns and Lehman Brothers. It’s the largest bank failure in terms of assets—some $209 billion at the end of 2022—since the 2008 financial crisis...

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