WTH Happened at Silicon Valley Bank? with Mike Konczal

Why Is This Happening? The Chris Hayes Podcast

NBCNews

News, Nbcnews, Why Is This Happening?, The Chris Hayes Podcast, Chris Hayes, Politics, Government, Society & Culture, Msnbc, Withpod

4.6 • 8.9K Ratings

🗓️ 28 March 2023

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

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Summary

Silicon Valley Bank’s recent failure marked the second-largest bank failure in U.S. history and the largest since the 2008 financial crisis. The run on the bank sent shockwaves through the financial world. Nearly 94% of its total deposits were uninsured, according to S&P Global Market Intelligence data as of year-end 2022. The series of events leading to its demise have been described by some as the perfect storm. Was it the result of Trump-era rollbacks of Dodd-Frank regulations, increased rate hikes, insufficient risk management, or a combination of factors? Mike Konczal is director of macroeconomic analysis at the Roosevelt Institute, where he focuses on economics, inequality and the role of public power in a democracy. He’s also the author of the book “Freedom from the Market” and a co-author, with Joseph Stiglitz, of “Rewriting the Rules of the American Economy.” He joins WITHpod to break down what happened to SVB, FDIC intervention, what made the financial institution so peculiar, what its failure says about the state of the economy and more.

Transcript

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0:00.0	We really did see a essentially bank run created in real time through social media in a kind
0:06.6	of very unique set of circumstances.
0:08.3	I mean, this, the moment right now has brought together all these different things that
0:11.6	are happening in the economy.
0:12.6	On one hand, you have like the culture of Silicon Valley, the collapse of this bank.
0:16.6	You have, you know, the financial regulations, the deregulations that have happened, the
0:20.4	question of what kind of financial crisis this is.
0:22.8	You also have the Federal Reserve hiking rates that kind of bumped into this.
0:26.2	So like wherever you're pulling on this, there's something that's really fundamental to
0:29.7	what's happening in the economy, very similar to the great financial crisis in 2008.
0:34.3	Hello and welcome to Wise This Happening with me, your host, Chris Hayes.
0:40.8	Well, if you're someone who's my age, just turned 44, you are of a generation, journalistically,
0:54.0	where you had to learn a lot about financial crises.
1:00.6	It didn't matter who you were really or what you were covering.
1:04.6	But particularly like me, I moved to Washington, DC with Kate when she got a clerkship on
1:09.0	the Supreme Court in 2007.
1:11.4	I became the Washington editor of the nation after that.
1:14.2	And this was when the first sort of signs of unease were starting in this, in what was
1:19.5	called the subprime market at that point, that this was a problem with subprime positions
1:23.0	as are the mortgages that were outside the sort of prime category, people with good credit,
1:29.6	with sort of quote unquote normal 30 year fixed mortgages.
1:33.9	People outside the normal prime credit, people who didn't have standard 30 year fixed mortgages,
	...

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