Silicon Valley Bank's three fatal flaws

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 14 March 2023

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

For decades, Silicon Valley Bank was the bank for thousands of startups and tech companies in the Bay Area. No longer. SVB's sudden failure last week has roiled the tech world. And it forced regulators to step in as concerns grew about the wider financial system. On today's episode, we look at what happened at SVB, and the three reasons that made the bank especially vulnerable to collapse.

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Transcript

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0:00.0	NPR.
0:07.0	We have been watching these huge waves rock the banking world over the last weekend.
0:17.8	The 16th largest bank in the country failed on Friday.
0:21.8	Then on Sunday, the government said it was taking over another big bank.
0:26.0	President Biden was up on the podium this morning trying to project calm.
0:30.2	Look, the bottom line is this, Americans can rest assured that our banking system is safe.
0:36.8	Your deposits are safe.
0:38.6	The government is moving to protect customers' deposits because everyone is worried about
0:43.1	contagion.
0:44.6	One bank failure leading to the next bank failure, which could cripple businesses and households
0:49.4	all over the country, and we could be plunged into some pretty dark economic waters if
0:54.6	that were to happen.
0:55.6	Today, we're almost at this quiet in the storm, hoping the biggest bank failures since 2008
1:01.6	have been contained.
1:03.9	This is the Indicated for Plenty of Money.
1:05.2	I'm Adrian Ma.
1:06.2	And I'm Darien Woods.
1:07.2	Today on the show, what happened with the big bank where this all started?
1:11.8	Silicon Valley Bank.
1:17.8	The show is supported by NPR sponsor Burrow, the furniture company that's reinventing
1:22.2	everything you thought you knew about furniture.
1:24.9	Their new outdoor collection is sleek, comfortable, and built to withstand the elements.
	...

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