In early March, Silicon Valley Bank (SVB), which had lent heavily to start-up companies, was closed down, followed two days later by the closure of Signature Bank. [19] As in the TPI episode, the turbulences were related to monetary policy.
The sharp hiking cycle exposed the risks that had built up at SVB over time, due to its failure to properly manage its interest rate and liquidity risks and a lack of sufficient supervisory scrutiny. [20] Two key factors led to SVB’s demise. The first was its peculiar deposit structure.