The collapse on Friday, the largest bank failure since the 2008 financial crisis, had a unique set of circumstances but raised questions about hidden weaknesses that could have consequences for customers and employees and potentially highlight issues in other banks.
SVB’s plight could lead to a loss of confidence, tougher regulation and investor skepticism about the financial health of smaller banks that were seen as adequately capitalized after regulators forced banks to hold more capital in the aftermath of the 2008 crisis, experts said.
Sheila Bair, who headed the Federal Deposit Insurance Corp (FDIC) during the global financial crisis, said in an interview that bank watchdogs are likely now turning their attention to other banks that may have high amounts of uninsured deposits and unrealized losses, two factors that contributed to SVB’s quick collapse.
“These banks that have large amounts of institutional uninsured money…that’s going to be hot…
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