What will we observe about the banking crisis in America?

The bank failed to follow an important piece of advice for investors: spread your risk. That turned out to be a huge mistake, especially when interest rates rose. Yields on new government bonds also increased. Bonds issued earlier with lower interest rates will not be lost in paving stones.

As savers ask for their money, those who suddenly have to sell these are left with baked pears. That’s what happened with SVP From the message The bank filed with the US Securities and Exchange Commission (SEC).

The sale of $21 billion worth of bonds resulted in a loss of $1.8 billion. This was the starting signal for other SVB customers to receive their savings, a real bank move.

4. What is banking operation?

When savers withdraw money from their bank account in bulk, they fear it will no longer be safe. It’s often a self-fulfilling prophecy: if you suddenly need a lot of money, you’ll have a problem with the bank.

No bank holds so much cash that it can pay all its depositors their money if they ask. SVB certainly didn’t, so the bank had to file for bankruptcy last Friday.

A bad news for all savers who failed to withdraw their savings. Fortunately for them, the US government stepped in to help. He promised to compensate all savers last weekend. Tax money is not used for this, money is collected from other banks.

Savers of SVB’s British branch have found shelter in banking giant HSBC.

5. What do we observe in the Netherlands?

Not as much as a ‘normal’ consumer (yet). Due to European rules, Dutch banks must maintain higher buffers than banks in the United States. Those capital requirements have tightened significantly since the 2008 financial crisis following the collapse of Lehman Brothers.

Layman’s demise is now often mentioned. But that’s wrong, writes Lucas Dalter In Financieele Dagblad. He is Head of Investment Strategy in the Netherlands at BlackRock, one of the world’s largest asset managers.

Banks’ buffers are too high now, Talder argues. In addition, according to him, SVB cannot be compared with other banks because of its poor investment strategy by focusing on a specific group of customers and holding such a large amount of securities.