Although Silicon Valley Bank itself was not systemically important to the US financial system, it could signal more widespread problems that are only just coming into view. Many other banks also have large portfolios of long-dated securities and would incur heavy losses if sold before maturity.
BARCELONA – Should the rest of the world be worried about the collapse of Silicon Valley Bank last week? SVB was the 16th largest bank in the United States, with about $210 billion in assets and a market valuation of $44 billion at its peak. That makes this the second-largest US bank failure (following Washington Mutual in 2008). Although SVB itself was not systemically important to the US financial system, it could be a warning sign. This past weekend, regulators also shut down New York’s Signature Bank, and banking-sector stocks tanked.
BARCELONA – Should the rest of the world be worried about the collapse of Silicon Valley Bank last week? SVB was the 16th largest bank in the United States, with about $210 billion in assets and a market valuation of $44 billion at its peak. That makes this the second-largest US bank failure (following Washington Mutual in 2008). Although SVB itself was not systemically important to the US financial system, it could be a warning sign. This past weekend, regulators also shut down New York’s Signature Bank, and banking-sector stocks tanked.