Rising interest rates, which brought down the U.S. banking system’s market value of assets by $2 trillion, combined with a large share of uninsured deposits at some U.S. banks, threatens their stability.
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The perfect mix of losses, uninsured leverage and a greater loan portfolio, among other factors, resulted in the fall of Silicon Valley Bank (SVB). Comparing SVB’s situation with other players revealed that nearly 190 banks operating in the United States are at potential risk of a run.
While SVB’s collapse came as a reminder of the fragility of the traditional financial system, a recent analysis by economists showed that a large number of banks are just uninsured deposit withdrawals
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