Ep. 107 - Lessons learned from a modern day bank run

Street Talk

Higher rates have put deposits under pressure across the banking industry, but liquidity strains have been far more pronounced at a few banks, resulting in severe hits to their stock prices. Crypto-focused bank Silvergate announced plans to voluntarily wind down its operations after facing a liquidity crunch, but others like SVB Financial raised capital and purged its bond portfolio after seeing a higher cash burn among its clients. In the episode, Todd Baker, a senior fellow at the Richman Center for Business, Law and Public Policy at Columbia Business School and Colombia Law School, discussed the recent liquidity crunch at Silvergate, the asset/liability management lessons observers can learn from the turmoil and the risk that banks face when focusing on a given industry. Baker, who previously served as the chief corporate strategy and development officer at three large banks, also provided insight into the unfolding situation at SVB Financial.