Bank failure déjà vu
New bank capital rules were meant to ensure failures would be less frequent and resolution not involve taxpayer money. Then came the collapse of Silicon Valley Bank and Credit Suisse, writes Jesper Berg
The Federal Reserve published a report in late April on the failure of Silicon Valley Bank (SVB). The report included criticism of supervisors for not fully understanding the risks in the bank, not acting promptly to address risks they were aware of and for reducing regulatory standards because of federal legislation. In the end, the bank failed because depositors lost confidence in the bank following market losses on a portfolio of bonds that were not marked to market. At market value, the bank
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