In the past two weeks, Silicon Valley Bank $SIVB and Signature Bank $SBNY have collapsed. Credit Suisse $CS.US has been acquired by its rival UBS $UBS . There have been a bank run among the regional banks and deposits have increased among the big banks such as JPMorgan Chase $JPM . Are we in a 2007 situation that led to a global financial crisis or 1907 situation which was resolved in a few weeks?
The main reason why we are seeing these crises is with these banks not being properly hedged against fast-rising interest rates. In the case of Silicon Valley Bank, the bank had among its clients, venture capitalists and tech companies which thrived on a low interest rate environment.
How far will this crisis go?
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