Silicon Valley Bank’s failure shines light on dangers lurking in higher interest rates
Financial Times/Brooke Masters/3-11-2023
“Silicon Valley Bank’s failure on Friday was an extreme consequence of broad trends squeezing profits and clouding the outlook for the banking sector.”
USAGOLD note: A new and different kind of contagion……Instead of one bank creating a domino effect, we have a set of circumstances that could bring down any number of banks. The problem is ongoing, widespread, and difficult, if not impossible, to manage – a rate-driven sword of Damocles hanging over the banking system. Bloomberg reports that the FDIC warned last week that it is “a $620 billion risk lurking in the US financial system.”
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