This week’s episode is all about the Silicon Valley Bank failure, which works primarily with startups. Throughout the episode, Grant discusses everything that happened in the bank, the reasons behind its downfall, and how we should be careful about the situation as investors, depositors, or users.
Show Notes
[05.27] Signs of stress – Grant starts the conversation by sharing some of the warning signs that the bank was in trouble.
[13.25] The mistake – Grant explains the how the mistake of going out on the maturity curve contributed to the downfall.
[22.05] Creative ways – Grant shares some creative ways Silicon Valley Bank could remedy the situation.
[26.45] Moral hazard – A moral hazard takes place when one side in a transaction has the chance to take on additional risks that are bad for the other party.
[35.00] SIPC – Grant explains how securities investor protection works in a bankruptcy scenario.
[42.38] FDIC limitation – We discuss the reason for the federal government to limit banks from growing into massive entities.
Resources
Easy Loans, Great Service: Why Silicon Valley Loved Silicon Valley Bank –
wsj.com/articles/easy-loans-great-service-why-silicon-valley-loved-silicon-valley-bank-6b3f203e
New Questions About Goldman Sachs’s Work With Silicon Valley Bank –
nytimes.com/2023/03/15/business/goldman-svb-silicon-valley-bank.html