Published on 23 Mar 2023 on Forkast News via Yahoo Finance
Who should be held responsible for the Silvergate Bank and SVB crises?
Over the span of just one week, two U.S. banks, Silvergate Bank and Silicon Valley Bank (SVB), have experienced one crisis after another. The contagion caused a third bank, Signature Bank, to experience a run and eventual closure by U.S. regulators. Given Silvergate Bank’s relatively friendly posture towards cryptocurrency businesses and SVB’s partnership with Circle, a major issuer of the U.S. dollar stablecoin USDC, many mistakenly believe that this crisis was first triggered in the cryptocurrency space and then propagated to the traditional finance space. The truth quite likely is the opposite.
The events that transpired could well represent a systemic crisis in the banking system, and the extreme scenario could mean a further spread of panic, bank runs and even bank failures.