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The Silicon Valley Bank had well over 90 percent of its liabilities in uninsured deposits. That has to be a red flag to any bank regulator. These are the deposits that are more likely to run in a crisis, since insured deposits have no reason to flee. Also, most banks have more of their liabilities in the form of bonds or other fixed term debt that cannot run. The fact that the bank’s customers were highly concentrated in a single industry, the tech sector, also should have been a red flag. This is especially the case because tech has a long history as being a boom-bust industry. More
The post Regulation is Not a Mantra appeared first on CounterPunch.org.
This content originally appeared on CounterPunch.org and was authored by Dean Baker.