From Breakingviews - SVB proves even smaller banks are too big to fail
. The financial crisis which brought about its downfall triggered a years-long global push by regulators to make sure even the biggest lenders could be safely wound down. Yet last weekend U.S. authorities struggled to contain the fallout from the collapse of SVB Financial
, a relatively simple institution about half the size of the defunct Wall Street firm. The threshold for “too big” is smaller than many thought. Multiple mistakes contributed to the demise of America’s 16th-largest lender. The institution known as Silicon Valley Bank drew most of its clients from the tight-knit community of venture capital firms and startups which congregate around San Francisco. More than 90% of its deposits were above the $250,000 threshold guaranteed by the Federal Deposit Insurance Corporation, making them vulnerable in a panic.
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