Interest rate risk: SVB's nemesis a well-known foe in banking

Among the mysteries surrounding the collapse of Silicon Valley Bank, finance experts have fixated on the California lender’s failure to practice basic risk management.

A catalyst for SVB’s demise was the Federal Reserve’s shift from near-zero interest rates to large interest rate increases to counter inflation, a reversal that immediately lowered the value of SVB’s holdings linked to long-term US Treasury bonds.

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