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One Bank Folds, Another Wobbles and Wall Street Asks If It’s a Crisis

  • More lenders are struggling to keep deposits from fleeing
  • ‘Silicon Valley Bank is just the tip of the iceberg’
Bloomberg business news
SVB Races to Avoid Bank Run as Funds Advise Pulling Cash

Silvergate Capital Corp.’s abrupt shutdown and SVB Financial Group’s hasty fundraising have sent US bank stocks diving and tongues wagging across the industry: Could this be the start of a much bigger problem?

The issue at both of the once-highflying California lenders was an unusually fickle base of depositors who yanked money quickly. But below that is a crack reaching across finance: Rising interest rates have left banks laden with low-interest bonds that can’t be sold in a hurry without losses. So if too many customers tap their deposits at once, it risks a vicious cycle.