- Regulators' decision to bail out two midsized banks, Silicon Valley Bank and Signature, sets dangerous expectations for future bailouts.
- The failure of these two banks, with combined assets of $300bn, poses minuscule risk to the US's $23tn banking system.
- Uninsured depositors of SVB include leading venture capitalists and their portfolio companies who are financially sophisticated.
- Regulators need to review all banks' capital capacity to withstand market losses on their securities portfolios.
- The government needs to be careful in its communication to avoid causing deposit runs.
US regulators are setting a dangerous precedent on Silicon Valley Bank
US regulators' decision to bail out two midsized banks poses a dangerous precedent for future bailouts, despite the banks representing a minuscule part of the US banking system. The decision could set dangerous expectations for future bailouts and uninsured depositors include leading venture capital