S3E2: Shaun Davies - Bank Failure Fallout

Both Silicon Valley and Signature Bank are two of the top three largest bank failures in American history, both in terms of dollars, but also on an inflation-adjusted basis. And they happen just a few days apart, just over 2 weeks ago now.To get more insight on this incredible financial event, we sat down with Shaun Davies. He is an associate professor and research director of the Burridge Center for Finance at the Leeds School of Business.We grabbed some time with Shaun during this hectic week to get the low down on what the SVB collapse means, the parallels between the 2007/2008 financial crisis and today, and what to look out for moving forward.Leeds Business Insights Podcast is a production of Leeds School of Business and is produced by University FM.EPISODE QUOTES: Bank fraud still exists[00:09:01] Typically, when we think about bank runs, we think back to black-and-white movies, like "It's a Wonderful Life," and we think that bank failures, they’re a thing of America's past. Well, the Silicon Valley Bank failure showed us that bank runs still exist. They can still happen.The unexpected failure of Silicon Valley and Signature Bank[00:03:44] Silicon Valley and Signature Bank are two of the top three largest bank failures in American history, both in terms of dollars but also on an inflation-adjusted basis. Even when we take bank failures 25 to 30 years ago, these are still larger, even on an inflation-adjusted basis. And it's hard to believe we saw that out of nowhere. And in the span of a few days.Moments of crisis should be expected[00:24:38] There will never be a time in which all risks are hedged, and everything is safe. Moments of crisis, massive stock market volatility, moments of your portfolio going down in value. Those should be expected. They're not fun, but they should be expected. SHOW LINKS:Faculty Profile at Leeds School of BusinessBurridge Center of Finance at LeedsLatest News: SVB Collapse Dodd-Frank Act