Why did Silicon Valley Bank Fail?

Closely related to this are my videos on:
1. Trading Book and Banking Book
2. Interest Rate Risk in the Banking Book
We are living in exciting times! The failure of Silicon Valley Bank is an excellent application of everything I have taught in my course on risk management at banks. Honestly, it is shocking that something like this can happen. Silicon Valley Bank failed to manage the most basic sources of risks a bank can have.

[@lhistoirenimp4537]

Love the channel! Already watched all the Risk Management videos. It's so well explained, thanks so much for these videos!! I finally understand Basel 3, IRRBB, etc.

[@SubhamSatapathy]

Most concise explanation with all important concepts addressed.

[@jackblack2548]

Beautifully explained 👏

[@neyazahmad1847]

Very simple and clearly explained the whole scenario of SVB banking disastaer . I greatly appreciate the way you present it Sir.. Huge thanks to you.. Keep sharing you extensive knlowledge and expertise which people like me would take advangtage of it and improve our knowldge base on banking.

[@meltdownman1]

Could you look at PACW? Is it the next bank to fail?

[@adrianagby]

Love the explanation. Question: do you think if Trump wouldn’t have lifted the regulation, they would have been forced to use AOCI in their calculations and therefore avoid the fail?

[@FinAndEcon]

I think the main problem was that they did not have any real supervision. With better regulation, they would have had regular inspections from banking authorities who would have definitely seen the problem

[@mphys5370]

It would be interesting see a real life worked example. I.e. You calculate the EVE and NII, what issues do you see and what can you do? In the case of SVB I assume that thetshould of seen a large change in PV applying a particular shock to interest rates but then what? I guess this is where you need AFS and HQLA in times of distress?

[@kaiwang2924]

Wonderful

[@jackblack2548]

So what are the regulators doing while performing inspections? What are internal auditors doing? What are capital adequacy managers doing? Why all the noise after the failure?

[@FinAndEcon]

You are right this is an incredible failure of internal and external controls. I am also dumbfounded

[@vipinrawat1997]

good

[@heliheli6808]

Abit strange that banking book doesnt reflect the mv, unlike the impairment accounting

[@FinAndEcon]

I mean it makes sense as the bank does not plan on selling these assets - the market value does not really matter for them.

[@TgiSlayer]

@@FinAndEcon….unless there are issues with liquidity right?

[@menii7476]

@@FinAndEcon Except for Large banks, small banks are not required to mark to market held to maturity securities.

[@BUY_YOUTUBE_VIEWS_665]

I love how this content challenges me to step out of my comfort zone. 🚶‍♂️

[@sandeepsinghsingh]

Why blame Trump?