Bailout or not?

Ad hoc steps to stop banking contagion may have implications

The fall of Silicon Valley Bank (SVB) has had effects around the world. Its affiliate in the UK has been acquired by HSBC; Japan’s SoftBank Vision Fund, already under pressure, will see more of its investments sour; Sweden’s pension fund lost over a billion dollars. But the immediate risk of a major financial crisis and broader bank contagion seems to have been contained, thanks to swift action over the weekend by market regulators in the US. It was announced on Sunday that, while equity holders in the bank would be wiped out, the federal government would ensure that no depositors,