White House Fed to blame for SVB closure
Elsewhere responsibility and even in this article on the shoulders of bank officials for making the wroong callls ie investing short term deposits in long term bonds But who wants the company you are leading to fail to leave a bad legacy? Or have enemies for making depositors lose their money? None I guess
But SVB was in a tight squeeze, it could not have decided otherwise:
1. It could not make loans to start ups who were awash with cash;
2. It had no choice except to go long term to get higher returns to cover their costs and high liquidity level
The rest of responsibility lay outside (Fed)
1 For loosening reins on money supply since debacle of 2008;
2. For increasing interest rate lately to rein in money supply and inflation..
SVB just could not take the strain from loose money to tight money supply high interest rate environmnet
Even investment in equitiies was a a nono The stock prices were crashing.
We just hope that even with CSB difficulties, the contagion does not spread to Europe and/or Asia
