High Interest Rates and Mismanagement
Skip and Dez discuss how high interest rates and mismanagement played a role in SVB’s downfall. As interest rates rose, SVB’s customers faced financial difficulties, leading to withdrawals. Meanwhile, SVB’s investments in long-term, safe assets like US Treasury Bonds lost value due to the rising interest rates. The bank sold these bonds at a significant loss to cover customer withdrawals, triggering a crisis of confidence.
Social Media’s Role and FDIC Protection
They also explain how social media played a part in SVB’s rapid collapse and how the FDIC stepped in to guarantee deposits, easing customers’ concerns.
Listen to the podcast to learn the answers to these questions and improve your business English listening skills.
Why did Silicon Valley Bank fail?
How did high interest rates and social media play a role?
And what other banks have met the same fate as SVB?