Lessons from the SVB Collapse
Although Silicon Valley Bank was not deemed to be systemically important, its insolvency forced the US Federal Reserve to head off systemic contagion and exposed the inadequacy of the FDIC’s partial deposit insurance regime. The financial-stability framework adopted after the 2008 crisis obviously needs another overhaul.
LONDON – Does Silicon Valley Bank’s collapse reveal a fundamental weakness in the current financial-stability framework, or does it merely point to a localized failure of supervision?