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“I don’t think anything could have helped withstand a withdrawal rate of $42 billion,” says Chip MacDonald, financial markets specialist at Jones Day. “If $42 billion out of a total $200 billion of assets walks out the door in 24 hours – nobody maintains that kind of liquidity. The fact is SVB had a very concentrated customer base with a concentrated behaviour pattern.”
It is widely agreed that its concentration of deposits among the venture capital community was behind Silicon Valley Bank’s downfall on March 10 this year.
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