For subscribers
SVB shows the perils of regulators fighting the last war
Worries have focused on credit and liquidity risks rather than interest rates
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A line of clients outside the entrance to Silicon Valley Bank's headquarters in Santa Clara, California, on Monday.
PHOTO: NYTIMES
Gillian Tett
How could regulators have missed the risks at Silicon Valley Bank (SVB)? That is the question many shocked investors were asking on Monday.
After all, the fact that SVB was sitting on a massive, unhedged portfolio of long-term Treasuries was no secret; last year, JPMorgan circulated shocking calculations to its clients (which were recirculated this week) that showed that these (then) unrealised losses could wipe out tier one capital.
