Higher interest rates tend to trigger financial bombs, so there was always a chance of explosions as rates increased.
This has already caused some problems.last September, part of the reason it caused such chaos in financial markets was that they were concurrently trying to deal with an enormous influx of government bonds.expectations spiralled, causing a crisis in certain funds underlying the pensions market, it was seen by some as the canary in the economic coal mine - a sign of what can go wrong when interest rates lurch much higher.
Founders would get big infusions of cash and plonk it straight into their accounts, and since they rarely took out loans , SVB had to put that money somewhere. That had a particular bearing on smallish banks like SVB which were deemed less worthy of scrutiny since they were seemingly less"systemically important".
The"sort of" matters here because while this looked and walked like a bailout it wasn't exactly what you'd call a traditional bailout. That raised other questions: if SVB was systemic then what about the hundreds of other smallish banks dotted around America?
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