Product details

Banking was a serious business dealing with public money. Banks had a fiduciary character which implied that it was a business squarely resting on trust, credibility, and confidence. Trust and faith itself was a function of resilience, profitability and long term solvency of the banks which was reinforced by elements like capital adequacy and liquidity. However, on March 10th 2023, the Silicon Valley Bank, the 16th largest bank of the US, commanding USD212 billion of assets at one time collapsed, making it the biggest lender to collapse since the global financial crisis of 2007-09, presenting a classic example of how short term liquidity crunch may hit the credibility, dilute confidence through a chain of events and eventually lead to the collapse of a giant among financial institutions. The fall of the bank threw up questions both on the fragility of the US financial system and the proficiency of the regulators in anticipating and proactively plugging the holes in the financial fabric. The subsequent failure of Signature Bank and the widespread weakness shown in many other banks in distant geographies intrigued the analysts who fervently debated on whether the event was a one-off accident or the tip of an iceberg.