President Biden is, we are told, planning to address the nation on the
situation with the Banking system. In the wake of the collapse of Silicon Valley Bank,
wants to re-assure one and all that the system as a whole is safe although he is
not planning on helping investors. (Crédit Suisse in Europe has been struggling
for a while, now).
The underlying drama that shook SVB is clear enough: they were holding a lot
of government bonds, now worth less than their paper value because interest
rates have soared so much in the last year. Their clients were tech start-ups, a group
first vulnerable to a tightening economy. Voilà for the elements of the situation.
Easy enough to presume that many other financial institurion are holding such bonds.
Banks and Pension Funds. Not all may be looking to sell these off in the current unfavourable
context, so that things carry on.
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