Earnings Outlook: SVB and Silvergate Failures Reveal Emerging Risk to Markets
- By John Tierney
- 4 min read
Summary
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- The failures of two banks serving esoteric corners of the economy (crypto and Silicon Valley) highlight rising financial stress in the economy.
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I think you have very well pointed out how both these banks served a particular segment in the financial landscape which is usually associated with high risk. It means investors within the high risk space are definitely on the edge and waiting for the signal that things are out of hand. This is very concerning as this lack of trust and certainty can and will create volatility. I cant say it was because of just ONE TWEET, but if ONW TWEET is all it takes for a run on the bank, than there is something definitely wrong with the bank as well as the environment. The solution for institutional investors might simply be to go for bonds or low risk investments for sometime, which will ofcourse put a dent to investments into business but may that may create systematic risk of its own.