SVB’s Contagion Risk Is Bigger Than Banks
- Bank lending standards may become much tighter, analysts warn
- Index of financial conditions sinks to lowest since last year
Customers in line outside Silicon Valley Bank headquarters in Santa Clara, California.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
While all of the initial talk was about Silicon Valley Bank deposits and any potential impact for other banks around the globe, investors now have moved their attention to a much bigger potential contagion victim: the US economy.
Without neglecting the risks within the financial system, some moves over the past days looked overdone if you “only” consider the pure threat of another bank run, especially in Europe.