FDIC Shutdown Of SVB Sparks Banking Crisis Fears, But For Now, Bank’s Collapse Is Just A Cautionary Tale

By Rachel Witkowski 

The abrupt implosion of Silicon Valley Bank (SVB) on Friday—the second-largest U.S. bank failure in history—is a warning to financial companies against placing all your bets on one market-sensitive horse, rather than an indication of a broader systemic problem among banks….“SVB’s balance sheet looks nothing like most U.S. banks ergo this is contagion risk due to reputation—dangerous as hell—but … early warning of hidden risk at GSIBs, most other banks,” tweeted Karen Petrou, managing partner at Federal Financial Analytics, on March 10 following news of the bank’s failure. Most analysts shared a similar perspective, with CFRA Research maintaining its “neutral outlook” on diversified U.S. banks.