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No Systemic Risk from SVB Failure, but Watch Out for Areas of Vulnerability
Tuesday 14 March 2023
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No Systemic Risk from SVB Failure, but Watch Out for Areas of Vulnerability
March 2023 | The SVB bank failure is the third after Signature Bank and Silvergate Bank, and it is the largest bank failure since the 2008 financial crisis, with SVB being the 16th biggest US bank. The failure was mainly due to an asset-liability mismatch, which resulted in the materialization of losses from sales of quality bonds that were trading down amid rising yields over the last year.
01 | SVB bank failure is the third after Signature Bank and Silvergate Bank, and it is the largest bank failure since the 2008 financial crisis, with SVB being the 16th biggest US bank.
02 | We believe this is not a systemic risk: while being a negative for the market, the SVB failure is more of an idiosyncratic story rather than a systemic issue.
03 | While we believe the Fed will remain committed to fighting inflation, it will have also to assess the impact of the current crisis and its potential spillovers in its policy.
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