Is the “Lehman Crisis” Reappearing

Abstract

On March 7, 2023, Silicon Valley Bank (SVB) announced that it is honored to have been named the best bank in the United States by Forbes magazine for five consecutive years. Dramatically, three days later, it collapsed within 48 hours due to insolvency, causing a huge uproar and becoming the largest bank failure in the United States since the 2008 financial crisis. This case firstly introduces SVB and its unique business model, outlines its process of suffering from severe runs and ultimately leading to bankruptcy after monetary policy changes, and states its series of subsequent impacts on the global economy after bankruptcy. Next, analyze the reasons for the bankruptcy of SVB from two aspects: the deficiencies in its own risk control and the lack of supervision from internal and external regulatory departments. Finally, by reviewing the entire process of the bankruptcy of SVB, we can obtain the enlightenment for China's banking industry and financial regulatory agencies from this incident.