This week’s episode is all about the Silicon Valley Bank failure, which works primarily with startups. Throughout the episode, Grant discusses everything that happened in the bank, the reasons behind it, and how we should be careful about the situation as investors, depositors, or users.

[05.27] Signs of stress – We start the conversation by sharing the reasons why Silicon Valley Bank is in trouble.

[13.25] The mistake – Grant explains the mistake Silicon Valley Bank made by going out on the maturity curve.

[20.25] Creative ways – We talk about different creative ways that can be used to get out of the current situation.

[26.45] Moral hazard – A moral hazard takes place when one side in a transaction has the chance to take on additional risks that are bad for the other party.

[35.00] SIPC – Grant explains how securities investor protection works in a bankruptcy situation.

[42.38] FDIC limitation – We discuss the reason for the federal government to limit banks from growing into massive entities.

 

Resources:

Easy Loans, Great Service: Why Silicon Valley Loved Silicon Valley Bank –

wsj.com/articles/easy-loans-great-service-why-silicon-valley-loved-silicon-valley-bank-6b3f203e

 

New Questions About Goldman Sachs’s Work With Silicon Valley Bank –

nytimes.com/2023/03/15/business/goldman-svb-silicon-valley-bank.html