From a regional bank collapse to a global banking crisis
The collapse of Silicon Valley Bank (SVB) has resulted in franticness in the banking sector often compared to the 2008 financial crisis. Although the Fed and other supervisory institutions have acted swiftly by assuring that all SVB’s deposits were going to be guaranteed, the bank’s collapse has already ignited a fear of spillover to other banks. Furthermore, the Fed finds itself facing a daunting task of determining the optimal balance between price and financial stability. Tomorrow's Fed meeting will reveal the seriousness of the issue and its determination to control inflation.