Adam Tooze: The Non-Bailout Bailout
Bad management and bad luck prompted the collapse of Silicon Valley Bank. What about other banks?
The U.S. federal government only insures bank deposits up to the amount of $250,000—under normal circumstances. But the failure of Silicon Valley Bank (SVB) last week triggered an extraordinary intervention, with Washington guaranteeing all deposits in full. It was an acknowledgment of the possibility that SVB’s failure might have produced a cascade of bank runs across the financial system—and also a reflection of the special status of the bank’s community of depositors, centered on California’s tech economy.
Cameron Abadi is a deputy editor at Foreign Policy. Twitter: @CameronAbadi
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