Why Silicon Valley Bank Crashed
March 17, 2023
And how to prevent the next bank failure.
The Roosevelt Rundown features our top stories of the week.
How Deregulation Made the SVB Collapse More Likely
The sudden collapse of Silicon Valley Bank—the second largest bank failure in US history—sent shock waves around the world this past week.
But the risk of such a crash has been clear since 2018, as Roosevelt fellow Todd Phillips writes for the blog.
“[D]ue to the rollback of several key Dodd-Frank provisions and an emphasis by lawmakers in 2018 that midsize banks receive lighter oversight than large banks, regulators did not supervise these banks sufficiently,” Phillips explains.
“SVB was one of the institutions that saw its regulations and oversight weakened.”
Read more from Phillips about the role deregulation played in SVB’s collapse, and what the Federal Reserve and Congress can do now.
And for more on the SVB crisis, check out this MSNBC piece by Roosevelt’s Mike Konczal.
Understanding Industrial Policy
“After a decades-long intellectual hiatus, industrial policy must be taken seriously as an object of study by the economics discipline,” Roosevelt fellow Nathaniel Lane and Réka Juhász write in ProMarket.
“In doing so, scholars need to interrogate how industrial policy is practiced in practice.”
Read on, and explore more of Roosevelt’s industrial policy research and analysis.
What We’re Reading and Listening to
Did the Fed Break Silicon Valley Bank? [feat. Roosevelt’s Mike Konczal] – Vox
Silicon Valley Bank’s Collapse and Rescue [podcast feat. Roosevelt senior fellow Saule Omarova] – NPR Planet Money
After Silicon Valley Bank, Scrap the Bank Deposit Insurance Limit [co-authored by Roosevelt fellow Lev Menand] – Washington Post
The Case for a Banking Public Option [feat. Menand] – The American Prospect
Three Numbers That Help Explain What Happened to Inequality during the Pandemic [feat. Roosevelt senior fellow Darrick Hamilton] – PBS Frontline