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What is covered?
In today’s video, we will understand the business model of SVB, the reasons of its collapse and the repercussions.
01:23 – What does the bank do?
06:02 – What went wrong with SVB
13:07 – What next?
#RachanaRanade #ShareMarket #Siliconvalleybank…(read more)
LEARN MORE ABOUT: Bank Failures
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Silicon Valley Bank, once an iconic institution in the heart of the tech industry, saw its downfall in recent years, leaving many wondering how such a respected financial institution could crumble. The collapse of Silicon Valley Bank can be attributed to a combination of internal mismanagement, external economic factors, and a changing landscape within the technology sector.
One of the main factors contributing to the collapse of Silicon Valley Bank was its exposure to risky loans and investments. As a bank focused on serving the technology and innovation sectors, Silicon Valley Bank had a large portfolio heavily reliant on startups and high-growth companies. While this strategy had paid off in the past, it proved to be a double-edged sword when the tech bubble burst in the early 2000s and again during the financial crisis of 2008. As these companies faced financial difficulties, Silicon Valley Bank saw its loan defaults spike, causing significant losses.
Furthermore, the mismanagement of funds and lack of risk mitigation strategies further added to Silicon Valley Bank’s downfall. The bank’s leadership failed to adequately assess and manage the risks associated with their loan portfolio, leading to significant losses when these loans went sour. Additionally, insufficient diversification of investments meant that the bank was overly dependent on the success of the tech industry, leaving it vulnerable to any downturns in that sector.
Another contributing factor to Silicon Valley Bank’s collapse was the changing tech landscape. As the technology industry evolved, traditional banks entered the space, offering similar services tailored specifically for tech companies. This increased competition eroded Silicon Valley Bank’s market share and put pressure on its profits. The bank struggled to adapt to these changes and failed to differentiate itself from new competitors, leading to a loss of customers and ultimately its demise.
Finally, external economic factors played a role in Silicon Valley Bank’s collapse. The global financial crisis of 2008 had far-reaching consequences for many financial institutions, and Silicon Valley Bank was no exception. The economic downturn resulted in reduced lending activity and a decline in the value of assets, putting additional strain on the bank’s financial health.
In conclusion, the collapse of Silicon Valley Bank can be attributed to a combination of internal mismanagement, external economic factors, and a changing landscape within the technology sector. The bank’s exposure to risky loans and investments, along with inadequate risk management practices, led to significant losses. Additionally, increased competition from traditional banks and a failure to adapt to changing market dynamics further contributed to its downfall. Silicon Valley Bank’s collapse serves as a cautionary tale for financial institutions and highlights the importance of strong risk management and adaptability in a rapidly changing industry.
Amazing ❤
I love learning with you!!
Can you please make one detailed video on Custodian Bank
Hello ma'am
Ek video hyavar pan banava..ek women la baby zaal ki career thambte
Mg ase astana financial independancy Kashi aanaychi??
Gharche boltat mg baalala kon sambhalnar? Job la gel tar..pls hyavar pan ek video banava na
Go into Bitcoin ❤
why does the bond price decline when the bond yield increases?
You didn't give your expert opinion as to what impact svb collapse will have on Indian stock market
Good morning Mam, thanks for this informative video.
1. I would like to request please make a video for Sahara India Pariwar investors .
2. Whether the investor would be able to get 100% maturity amount or not.
3. If yes, then please suggest how would it be possible to get 100% maturity amount…?
4. If NO, then please suggest some legal tactics to get atleast the invested principle amount..
Please Ma'am respond positively….
Money withdrawn should be kept elsewhere. That means deposit in another bank. Better to put the money in some fixed assets such as gold commodities Realestate land etc…
Hello mam… What's ur view on recent happening of SUNDARAM CLAYTON.. What should an investor do…
Thank you so much madam very clear cut explanation please keep uploading such informative videos
Thanks for posting!
Hindenburg should start to investigate American firms first…
A powerful coincidence is preparing in the US. Expansion, bank breakdown, serious dry season in the horticultural belt, downturn, real estate market decline, bank emergency, food deficiencies, diesel fuel and warming oil deficiencies, child recipe deficiencies, accessible car deficiencies and costs, the cost of residing place. It's all approaching together and it could prompt a genuine calamity towards the finish of this current year (or sooner). With expansion at present at around 6%, my essential concern is the way to expand my reserve funds/retirement asset of about $300k which has been exposed target since perpetually with zero to no increases.
I don't know but I didn't get notification about ur videos
I’m really worried about the current bank crisis. If a bank as big as SVB could fail, I fear for a lot more. I know a friend who is running a high-growth startup, and was badly hit by the bank run. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to $250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?
Indians didn't perform as promised. They also remit billions of dollars out of the US banking system every year. That's who caused it.
Hello Rachana,
Thank you for the fantastic video. Your video is not clear on the following two issues:
1. which bonds did SVB sell as a result of which they recorded a 1.8 billion in surprise bond losses. Was it from the held maturity portfolio or available for sale portfolio?
2. Assuming the deposits were rolling over as usual, why did the bank face a situation that they had to sell the HTM or AFS portfolio? Was it to ensure enough funds for withdrawal of customers before this debacle or was it to switch between portfolios?
If you can please throw some light on the above. Thank you
i loved you, mam
Thanks mam for your very clear explanation. Really helpful.
Very well done! Quick and precise
This bank is nothing
enjoyed listening
What if the bank will get some inflows from somewhere to recover these debts like heard some news Elon Musk might gonna infuse few funds to get them out of crisis..
I think SVB Bank may not be bankrupt if they buy Interest Rate Swap.
Beautiful explanation
Very well explained. The simplification of complicated cases is a virtue you possess. Keep it up.
When its such a big bank why it did not sell as soon as fed started raising rates why at the end of raising cycle
Is it all planned to ????
Ma'am , that fall in svb stock price leads to fall in indian bank price and niftybank values more down?? Why it is affecting so much on indian banks??
Mam there was one doubt related to share taxation……….
If my profit is more than 2.5 lakh then I have to pay tax……
But this tax is paid to single stock… Or total all stocks….
Ex:- ITC total profit 2 lakh and Tata elexi profit 1 lakh…….. So then I have to pay only 15 or 10 % long or short term tax……
Or total tax on 3 lakh profit…..
Trident ka btao kya hoga?
wondedrful explanation backed by the reliable sources and facts !
Thanks for a lucid explanation. If they had invested in HTM Securities, why does the bond price impact the valuation. They are intended for redemption on maturity.
content, context, crisp & clean.
And they say Crypto is vollatile
But why yield became high and bond security gone down as we consider it is the most secured type of investment?
Awesome and clear explanation ma'am. Thank you.
Madam our banks also invested in 2020 Gov bonds and yield increase for our case also
Wonderful explanation
why were svb not able to see that yield price would increase?
Thanks Madam, well explained. SVB invested the huge easy money received in 21…into LT govt bond investments, which is legally allowed and nothing wrong. However, due to Fed action of raising interest rates, short term yield higher than long term yield. This led to inversion of yield curve and SVB failed. This failure is looks like mainly due to the effect of FED action. Please clarify how the indian markets and banks are connected and going to be affected
Mai chahta hu 2008 si vi bda crease aai
Ma'am please hindi me samjaye mere jaise anpadh ko samj aaye
The failure of Silicon Valley Bank has torn into global markets, with investors ripping up their forecasts for further rises in interest rates and dumping bank stocks around the world. I'm at a crossroads deciding if to liquidate my dipping 200k stocck portfoliio, what’s the best way to take advantage of this bear market?
same thing will happen in india ,if bank fund for adani kind of companys