After Lehman Brothers in 2008, Silicon Valley Bank’s (SVB’s) fall is significant because of its role in an area that is highly innovative and productive and an innovator for the world at large. The fallout gives rise to the question of whether constructive approaches can preempt a recurrence.
Simplistically, banks rely on customers ordinarily withdrawing only a portion of their deposits. Reality is more complicated, with customers seeking higher returns from mutual funds, or in direct investment in stocks, bonds, and other assets. Still, banking works on trust, with people believing they can get their money when they want.
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