D:: [[2023]] # Events * [[Silicon Valley Bank]] and [[First Republic Bank]] have seen regulator action * [[Credit Suisse]] taken over by [[UBS]] due to action by Swiss authorities # Explorations ## Are larger banks at risk of what happened to Silicon Valley Bank? [Source](https://youtu.be/ZPlrkr1qaE0) - The short answer is **no** - Liquidity Coverage for other larger banks is healthy - Losses on Held-to-Maturity securities (which can be hidden because they are recorded in the balance sheet at amortized cost) are pretty large for these banks, but: - they do not exceed Common Equity Tier 1 (CET1) - they are hedged by a large amount of interest rate swaps - Silicon Valley Bank had [no chief risk officer](https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/) for 8 months and that reflected in the fact that they didn't really have anything to hedge the risk of rising interest rate swaps on their held-to-maturity portfolio - It seems to be a trend that when tech meets finance, the result is quite messy. Are many fintech firms just [[regulatory arbitrage]]?