The SVB Effect Is Spreading
The only thing markets are watching, at the moment, is the fallout from the Silicon Valley Bank (SIVB) collapse last week. As nearly 50% of the global tech sector banked with SVB, it became an immediate, systemic economic crisis. Around the globe, central bankers and Treasury Departments spent the weekend looking to stem crises across the banking industry.
The reality, in hindsight, is that SVB was an accident waiting to happen in plain view, wholly reliant on a single sector rather than on diversified funding sources. And the bank has now been shown to have been totally incompetent at the basics of managing banking risk.
This post originally appeared at Investors Alley.
