Silicon Valley Bank (aka SVB) collapsed on March 10, followed by Signature Bank two days later. Fearing mass panic, the FDIC decided to make whole all deposits at both banks, even though they were insured only up to $250,000. On March 16, First Republic Bank was saved from bankruptcy when several large banks lent it $30 billion.
Although things have since quieted down, two questions remain. How many banks are in trouble, and do we face a banking crisis? Paul Krugman, writing in the New York Times on March 13, declared that SVB was not Lehman. But this is the wrong juxtaposition. The issue is whether SVB will be more like Bear Stearns in March 2008 the canary in the coal mine that dies several months before the financial crisis hits.
Unli…
Read the full article at: https://washingtonspectator.org/another-banking-crisis-in-making/