Bottle Rockets and Falling Skies: How SVB Crashed and Why It’s Not the End of the World

Source: American Institute for Economic Research
by Tarnell Brown

“On an otherwise sleepy afternoon of Friday, March 10, 2023, we witnessed the second-largest bank collapse in US history. Around midday, the California Department of Financial Protection and Innovation (DFPI) announced that it had taken possession of Silicon Valley Bank (SVB), an institutional darling of the tech sector, and appointed the FDIC as the now-failed bank’s receiver. Ironically, the firm’s parent company, SVB Financial Group, had just been awarded Bank of the Year at a posh London gala earlier in the month. Not surprisingly, skittish investors reacted immediately to the news, as the day before, the four largest US banks lost some $52 billion of market value. More on why this happened to follow. How did we get here, and what does it mean?” (03/17/23)