From WSJopinion: Who killed SVB? Apparently no one at the firm perceived any risk from the Fed raising interest rates, writes andykessler
Journal Editorial Report: Paul Gigot interviews former Trump White House economist Kevin Hassett. Images: Bloomberg News/Zuma Press Composite: Mark KellyThat giant slurping sound on Friday was Silicon Valley Bank imploding. America’s 16th-largest bank had some $175 billion in deposits and disappeared by breakfast. It wouldn’t have happened if not for management mistakes. This was a 21st-century bank run—customers tried to withdraw about $42 billion, a quarter of all deposits.
Let’s go back. In January 2020, SVB had $55 billion in customer deposits on its balance sheet. By the end of 2022, that number exploded to $186 billion. Yes, SVB was a victim of its own success. These deposits were often from initial public offerings and SPAC deals—SVB banked almost half of all IPO proceeds in the last two years. Most startups had relationships with the bank.
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