As I understand it, here's a very simplistic explanation of what happened with Silicon Valley Bank.

[flashman13]

48. I think you are missing the big picture. While a single bank can suffer from bad decisions,

the Federal Reserve is responsible for the systemic problems created by catering to Wall Street, keeping interest rates unrealistically low in order to boost stock prices (also low rates encourage investment in poor quality projects). Now the Fed is getting it all wrong again by trying to fight inflation, which is being caused by a large variety of factors, none of which are low interest rates, by rapidly raising rates. They never should have allowed interest rates to sink to such lows and then hold hold those rates there for far too long. In 2021 SVB's investment strategy was conservative.

I hope I am wrong, but the SVB debacle could occur on a much larger scale because the balance sheets of many other institutions look the same as SVB.

In the near term it all comes down to the level of confidence in the system. If panic sets in, it's Katie bar the door. We'll know soon enough when Asian financial markets weigh in.