Coady: Government Prepared for Market Fluctuations After Brent Crude Prices Plunge - VOCM + MORE Mar 18th
Fed, other central banks set joint liquidity operation - Reuters.com + MORE Mar 19th
Canadian Banks' AT1s join selloff after Credit Suisse rescue - BNN Bloomberg + MORE Mar 20th
Making sense of the markets this week: March 19, 2023
Why are banks suddenly folding?
The big news of the week was, of course, that the 12th biggest bank in the U.S.A.—Silicon Valley Bank (SVB)—essentially went bankrupt. The final details are still being worked out, but the U.K. branch of SVB has been sold off to HSBC. And in Canada, the Office of the Superintendent of Financial Institutions (OSFI) has taken permanent control of SVB’s Canadian assets.
This is a fairly nuanced story that can lead you down a rabbit hole. To really dive in, I recommend this quick refresher on monetary policy.
The best explanation of what happened to SVB I could find was on Derek Thompson’s Plain English podcast. We’ll do our best to quickly summarize the bank collapse here, in order to better understand the broader systemic issues you may need to be aware of.
There once was a bank named SVB…