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Study finds 186 banks vulnerable to SVB-like collapse
Investors should not throw the baby out with the bath water in SVB collapse aftermath: Lori Calvasina
RBC Capital Markets head of U.S. equity strategy Lori Calvasina discusses the state of the U.S. economy in the aftermath of the Silicon Valley Bank collapse and ahead of the Federal Reserve March meeting.
A new study says that, depending on certain market conditions, nearly 200 U.S. banks could be vulnerable to the same fate as Silicon Valley Bank (SVB).
A recent Social Science Research Network study suggests that 186 American banks could fail if half of their depositors suddenly withdrew their funds. The researchers formulated a speculative scenario in which each bank experienced a run, and concluded that the FDIC would run out of money.
The study was published shortly after the collapse of SVB, the worst American financial institution failure since 2008.
"Our calculations suggest these banks are certainly at a potential risk of a run, absent other government intervention or recapitalization," the economists wrote.
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