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After SVB, will rising rates cause more mayhem?

18 March 2023

9:00 AM

18 March 2023

9:00 AM

How is it possible for a bank to collapse because it holds too many customer deposits – rather than too few, or too many bad loans? That was the mystery of the sudden failure of Silicon Valley Bank, America’s 16th largest, which had seen its cash holdings double to almost $200 billion during the pandemic period because its customers, mostly high-growth tech companies, were awash with venture capital funding that they could not immediately spend.

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