Inflation and rising interest rates killed Silicon Valley Bank, slowly moving their balance sheet out of balance. Depositors became suspicious and withdrew their money.: Jessica Anderson JESSICA ANDERSON: Congress Killed Silicon Valley Bank | The Daily Caller
The concern is that these banks hold a significant amount of their assets in interest-rate sensitive financial instruments like government bonds and mortgage backed securities. The value of those older, low-interest investments dropped sharply as the Federal Reserve hiked interest rates over the past year."
The culprit is all the money the federal government has pumped into the financial system over the past 15 years. After the financial crash of 2008, the Treasury and the Federal Reserve wanted to revive the economy by spurring yet more cheap lending and borrowing, ignoring how it was cheap lending and borrowing that had crashed the economy in the first place; household debt levels already stood at record highs. . . " Silicon Valley Bank: Who's to Blame? | City Journal (city-journal.org)
"In big, bold type on its website, Silicon Valley Bank bragged that “44% of U.S. venture-backed technology and healthcare IPOs YTD [year-to-date] bank with SVB.”
To put it bluntly, this was a Wall Street IPO machine that enriched the investment banks on Wall Street by keeping the IPO pipeline moving; padded the bank accounts of the venture capital and private equity middlemen; and minted startup millionaires for ideas that often flamed out after the companies went public. These are the functions and risks taken by investment banks. Silicon Valley Bank – with this business model — should never have been allowed to hold a federally-insured banking charter and be backstopped by the U.S. taxpayer, who was on the hook for its incompetent bank management."






