The speed at which deposits were withdrawn from SVB was much faster than expected – much faster than LCR calculations take into account. Which raises the question: should the LCR be calibrated differently? Should we assume higher outflow rates? And do we need to improve our stress tests?
We might also ask ourselves if there are shortcomings in the way we look at interest rate risk and the mismatches banks have on their balance sheets. In Europe, the Basel standards for interest rate risk have been introduced through the institution-specific Pillar 2 requirements, and they apply to all banks.