Insight

2023 Bank Failures — What Happened?

In what is considered the largest bank failure since the 2008 recession, the March 2023 failures and voluntary closures of Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank have sent shockwaves through the financial industry. This white paper will seek to explore and identify the cause of these failures and how Monex has mitigated the associated risk.

On March 8, 2023, California-based Silvergate Bank announced it would wind down operations and voluntarily liquidate following significant losses resulting from a major bank run. Silicon Valley Bank failed on March 10, 2023, due to a similar bank run. Regulators swiftly assumed control of SVB as a result. In the days following, Signature Bank was closed by regulators to stave off further damage to the broader financial system.

Following these failures, First Republic Bank experienced a similar depositor flight. Despite industry-wide efforts to rescue the bank, the fate of First Republic still hangs in the balance. Key similarities and likely contributing factors for these failures included an extensive portfolio of crypto-currency businesses and tech-start- ups, open investigations by federal regulators prior to the collapses, interest rate increases, and insufficient risk considerations, among others. The following report will detail an in-depth analysis of each bank’s failure.

Download 2023 Bank Failures Commentary

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Disclaimer: © 2023 Monex USA, Inc. All the content in this communication is for general information purposes only. This document has been provided in this forum to share general market activity, industry, or sector trends, or other broad-based economic, market, or political conditions and should not be construed as research or investment advice to buy/sell foreign currency or other products or services. In preparing this document, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or provided to us by or on behalf of the Company or which was otherwise reviewed by us. Any views, thoughts, and opinions expressed by the writer are solely those of the writer and do not reflect the views, opinions, policies, or positions of Monex USA. 

SOURCES:

• www.nytimes.com/article/svb-silicon-valley-bank-explainer.html
• www.nytimes.com/2023/03/20/business/first-republic-bank.html
• www.theverge.com/2023/3/8/23631320/silvergate-wind-down-liquidiation-announcement
• www.thestreet.com/investing/cryptocurrency/silvergate-bank-collapses
• cointelegraph.com/news/impact-of-the-silvergate-collapse-on-crypto-watch-the-market-report-live
• www.bankrate.com/banking/signature-bank-collapse/
• www.nytimes.com/2023/03/20/business/first-republic-bank.html
• www.bloomberg.com/news/articles/2023-03-13/svb-shock-stokes-dramatic-moves-across-charts-on-wall-street
• markets.businessinsider.com/news/stocks/svb-crisis-silicon-valley-bank-signature-biggest-collapses-ever-chart-2023-3
• www.cnbc.com/2023/03/13/first-republic-drops-bank-stocks-decline.html
• www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/signature-ny.html
• www.reuters.com/business/finance/new-york-state-regulators-close-signature-bank-2023-03-12/
• www.nytimes.com/2023/03/20/business/first-republic-bank.html
• www.npr.org/2023/03/27/1166180710/first-citizens-bank-to-acquire-silicon-valley-bank