The quick fall of Silicon Valley Bank has rattled financial markets and created fears about the beginning of a new financial crisis. My belief is that Silicon Valley Bank is an anomaly in the banking system. There is no need to rush to take money from banks and stick it under mattresses.
I have watched Silicon Valley Bank over the years and was always curious about how they got away with their work as an FDIC bank. They were always making aggressive loans that most others would never touch – and playing in a different league. It seemed that their primary clients and buddies were the world's venture capitalists and private equity folks – and they managed to lend their companies money at terms that most other banks wouldn't. So they were "other people's money" for their equity and venture friends, which let them extend their leverage.
If you are interested, my thoughts on this issue can be found at 21hats.
