The sudden collapse of Silicon Valley Bank and renewed crisis at Credit Suisse are raising fears of another global financial crisis, but most experts agree that we shouldn't worry too much … yet.
As depositors asked to withdraw their money, SVB was forced to sell many of these bonds at steep losses, which raised concerns it wouldn't have enough assets to pay out all the debts it owed as and when people demanded their money.
"The head of SVB was the one who lobbied to get those requirements that their bank be able to pass a stress test removed in 2018," she said."So I think you really want to focus on the risk taking." Capital Economics' chief European economist Andrew Kenningham said Credit Suisse's bad news came out at an inopportune time after SVB's sudden demise.
"I'm not saying it's free money, but you can borrow at a very reasonable cost against the full value of that asset, rather than the current market value of that asset," he explained.
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