On March 10, the largest US bank failure since the global financial crisis occurred in real-time when a major lender to the technology industry succumbed to a traditional bank run.
Customers of Silicon Valley Bank desperately pulled their money out of the Californian lender before US regulators stepped in to take control. But the collapse sent markets into a panic and heaped pain on weaker financial institutions already struggling with the unintended consequences of rising interest rates and self-inflicted wounds.
After a week, another American regional bank – Signature Bank – was closed, and a third – First Republic Bank (FRC) – was saved this is the first serious threat since 2008 to a globally important bank – Credit Suisse. — has been avoided since its takeover by UBS.
But the relative calm was restored only thanks to the provision of massive amounts of emergency money by the lenders of last resort – the central banks – and some of the industry’s strongest players. The market remains up, with shares of the US and European banking benchmarks down 20% and 13% since the close last Wednesday.