Matt Levine, Columnist

Branches Make Bank Runs Harder

Also XRP and orange groves, ARKK and VC megafunds, a $2 bill and a quote from the Odyssey.

July 17, 2023 at 4:22 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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We have talked a few times around here about two theories of banking, which I have unhelpfully labeled Theory 1 and Theory 2:

What I have said is that Theory 1 is the modern, markets-oriented interpretation, so that when Silicon Valley Bank failed due to a simple mismatch in interest-rate risk, a lot of people were puzzled that they missed that risk. But Theory 2 is the traditional model of banks and bankers and, often, bank regulators. I once wrote: