There's a crisis of confidence in the banking industry.

The collapse of Silicon Valley Bank and Signature Bank

has sparked broader concerns about the health of the U.S. banking sector.

I'm Allison Nathan, and this is exchanges at Goldman Sachs.

To explain the significance of these moves and the implications

to explain the significance of these moves and the implications for the banking

sector and the economy more broadly, I'm sitting down with my colleagues in Goldman Sachs

research, Richard Ramston, who leads our coverage of the U.S. banking

sector and Lafayette County Chief Credit Strategist. Richard Laffey, welcome to the

program. It's great to be out. Good to be here. So on Friday, Silicon Valley Bank, a lender to some of the biggest names in the

tech industry, became the largest bank to fail since the 2008 financial

crisis, and another large bank

signature bank became the third largest to fail shortly after.

So Richard let's just start with you.

How did we get here and how did this happen?

So let's start with Silicon Valley Bank and to explain how we're here I think it's important

to understand really the history. So Silicon Valley Bank was a commercial

orientated bank which really specialized in servicing the venture capital

community. Over the last few years, we've obviously seen extraordinary activity in venture capital

fundraising.

So in late 2020 and 2021, there was obviously considerable levels of fundraising amongst venture capital firms,

and Silicon Valley was a direct beneficiary of that.

...