Silicon Valley Bank’s failure started in 2009 when the Federal Reserve dropped interest rates to historic lows.
It accelerated in 2021 as low interest rates made it easy for the bank’s tech startup clients to raise money. They held that money in SVB’s coffers because they didn’t need it.
But SVB needed to put that money somewhere.
Managers decided to lock up billions of dollars in long-term bonds, the same bonds that will fall the most if rates rise.
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