The collapse of Silicon Valley Bank (SVB) in 2023 marked a turning point for the U.S. banking sector and reignited the debate around risk management, market confidence and the role of regulation. This document provides an in-depth analysis of what happened, why it happened and the key lessons that can be drawn from a financial and balance sheet management perspective. Below, we offer a brief overview of the main topics covered to help you decide whether to download the full report.

Key insights from the SVB Learning Points report

The SVB Learning Points document presents a structured analysis of the factors that led to the collapse of Silicon Valley Bank, with a strong focus on Asset & Liability Management (ALM) and interest rate risk.

Key topics covered include:

• The macroeconomic and financial context, shaped by the rapid interest rate hikes implemented by the Federal Reserve and their impact on the value of fixed-income assets.

• SVB’s exposure to unrealised losses, resulting from a high concentration in U.S. Treasury bonds and long-duration mortgage-backed securities, which at one point accounted for more than 60% of its balance sheet.

• The lack of interest rate risk hedging and capital requirements, as SVB was not required, due to its non-systemic status in the U.S., to fully comply with Basel III IRRBB regulations.

• The contagion effect on regional banks, with sharp stock market declines and episodes of bank runs that tested depositor confidence.

• SVB’s rapid growth in the years leading up to the crisis, driven by the technology sector boom and excess liquidity, and how this accelerated growth shaped its risk profile.

The document combines technical analysis, historical context and practical reflections, supported by data, charts and expert insights.

The collapse of Silicon Valley Bank was not an isolated event, but the result of a combination of strategic decisions, shifts in the economic environment and shortcomings in risk management. This document offers a clear and accessible overview of these factors, making it particularly valuable for financial professionals, risk managers and anyone interested in gaining a more in-depth understanding of how banks operate.

If you would like to explore the lessons learned from the SVB case and its impact on the financial system in greater detail, we invite you to download the full document.