The impact of the collapse of Silicon Valley banks
DOI:
https://doi.org/10.62051/npr8jh86Keywords:
Silicon Valley Bank; Fed Raises Interest Rate; Bank Run.Abstract
On March 10 in 2023, Silicon Valley Bank became insolvent, becoming the second largest bank failure in U.S. history. Due to the Federal Reserve's continuous interest rate hikes and an inappropriate asset portfolio, Silicon Valley Bank announced that it would sell US$21 billion in debt and issue new shares for financing. This move directly led to the collapse of Silicon Valley Bank. There was a serious run on small and medium-sized banks in the United States, stock prices plummeted, and the U.S. financial market experienced severe turmoil. This essay analyzes the reasons for the collapse of Silicon Valley Bank, its impact, and the inspiration that the collapse of Silicon Valley Bank brings to us.
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