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Intuitive Finance with Dylan Bain


Fiscally Savage

Take Control. Live Free.

Mar 17, 2023

The tech industry is facing yet another challenge as its go-to bank, Silicon Valley Bank (SVB) collapsed last week. Once a major lender to VC-backed startups, SVB is now the second largest bank in US history to go under.

 

The bank’s shocking failure immediately followed the collapse of Silvergate Bank, which served as one of the two main banks for crypto exchanges, along with New York-based Signature Bank — another bank that regulators shut down Sunday in a bid to prevent a looming banking crisis.

 

The federal government has now stepped in to make depositors whole. But while the recent and sudden deterioration of these crypto-friendly banks has been most impactful to the tech ecosystem, it underscores the risk of financial system interconnectedness.

 

In this Friday episode, Dylan breaks down the failure of the crypto banking trifecta, the government’s response to this crisis, and how this all relates to the debt ceiling debate.

 

Show Highlights

 

  • [02:16] Why Silver Gate Bank became the bank of choice for crypto exchanges

  • [05:54] What happens when a bank dies

  • [09:05] What are bonds?

  • [13:08] The two different types of investments that banks hold

  • [15:26] How and why Silicon Valley Bank suffered massive losses

  • [22:58] How the Silicon Valley Bank collapse affected the value of the USDC stablecoin

  • [26:58] Why people’s faith in financial markets is critical

  • [28:19] How and why Signature Bank collapsed

  • [30:49] How bank bailouts work

  • [34:43] How the collapse of the banks relates to the debt ceiling debate

 

Links and Resources