Connected Car
As an economist who has expertise in banking, I believe it boils down to two other big risks every lender faces: interest rate risk and liquidity risk. Interest rate riskA bank faces interest rate risk when the rates increase rapidly within a shorter period. All banks face interest rate risk today on some of their holdings because of the Fed’s rate-hiking campaign. Signature had just over 5% of its assets in cash and SVB had 7%, compared with the industry average of 13%. However, with over $1 trillion of bank deposits currently uninsured, I believe that the banking crisis is far from over.