In the past two weeks, the US banking system has experienced a crisis that has shaken the industry. Three banks, including Silicon Valley Bank, have failed, and US regulators have had to resort to using “exception” terms to cover deposits that weren’t previously insured.

Then the contagion spread to Switzerland, taking down the 166-year old Credit Suisse

In this exclusive interview with Mirror Now, Devina Mehra explains why confidence is the most decisive factor in banking and how things got into a mess.

Join us as we delve into the recent events in the global banking industry and explore what this means for the future of banking in India & Globally.

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The global financial crisis of 2008 exposed major flaws in the investment banking industry, leading to the collapse of several prominent banks in the US and Europe. Devina Mehra, co-founder of investment management firm First Global, has been outspoken about the issues that led to these failures.

One of the key issues identified by Mehra is the lack of regulation in the banking industry. Banks were allowed to take on risky investments without proper oversight or accountability, leading to their downfall when those investments turned sour.

Mehra also points to the culture of greed and short-term thinking that pervaded the industry. Many banks were focused on maximizing profits in the short term, rather than investing in sustainable long-term growth. This mentality led to reckless investments and a lack of diversification, leaving banks vulnerable to market fluctuations.

Perhaps most concerning is the lack of transparency in the industry. Mehra notes that many banks hid their true financial positions through creative accounting practices, making it difficult for investors and regulators to assess their risk and stability.

The failures of banks such as Silicon Valley Bank (SVB) and Credit Suisse were not inevitable, according to Mehra. If regulators had been more diligent in enforcing regulations, and if banks had focused on sustainable growth instead of short-term profits, these failures may have been avoided.

Mehra’s insights highlight the need for greater accountability and transparency in the investment banking industry. Without these changes, we may see a repeat of the investment crisis, with devastating consequences for the global economy.