Tight money: Banks feeling the squeeze of higher rates
Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Friday, March 10, 2023 witnessed the collapse of the Silicon Valley Bank Financial Group (SVB), the second-largest bank failure in US history after the demise of Washington Mutual during the 2008 financial crisis. Days later, two other banks followed suit, raising concerns about contagion risk across the banking sector. Not surprisingly, global market volatility has spiked amid the turmoil.
The bank failures highlight the unintended consequences of today’s tighter US financial conditions in the wake of Fed interest-rate hikes over the past year or so. As such, some observers are bracing for a systemic liquidity crisis and potential “feed-through” damage to the broader economy. To help prevent that scenario and boost public confidence, the Fed and the FDIC have taken decisive steps, including the launch of new liquidity facilities.
The situation remains highly fluid and continues to evolve rapidly, with risks and outcomes still very uncertain as of this writing. In the meantime, to help you understand and navigate this landscape, we have compiled a curated collection of timely insights from our investors and other experts.
