Silicon Valley Bank

While many were watching the Oscar’s, finance fans were watching the implosion of Silicon Valley Bank (SVB), the 16th largest bank in America.

Our TL;DR on what happened to SVB:

  • SVB’s primary customer base was the startup community. They were not very profitable for SVB (not big borrowers i.e. few mortgages and business loans).
  • 2020/2021: Low-interest rates + easy money environment allows startups to raise massive capital. SVB receives massive deposits (deposits grew from $74B in June 2020 to $212B in December 2022).
  • SVB customers still didn’t need loans, but SVB wanted to make some money… so they invested in longer-duration bonds with an average yield of 1.60%.
  • Enter 2022: Interest rates begin increasing.
  • Money no longer flowing as it once did, SVB startup customers start feeling pressure. Deposits slow, withdrawals increase.
  • Wednesday (3/8): SVB frees up money in their bond portfolio for customer withdrawals. They sell $21B of those longer-duration bonds for a $1.8B loss.
  • Perception: SVB looks financially shaky.
  • Thursday (3/9): Bank run begins. Customers request $42B of withdrawals.
  • Friday (3/10): SVB stops withdrawals, doesn’t open for business.
  • Sat/Sun (3/11-12): SVB customers with account balances > FDIC insurance limits fear they’ll lose their money.
  • Monday (3/13): US Government expresses that banking is a “system of confidence” and promises to make customers whole.

Who’s at fault?

Some blame the depositors for perpetuating their own bank’s demise.

Some blame regulators for missing SVB’s (now) obvious excessive risks.

Some blame the Fed for hiking rates so quickly.

While all of the above certainly didn’t help, it seems clear that SVB’s managers, supervisors, and leadership bear the burden of responsibility.

They miscalculated their risk.

Namely, they took duration risk on their bonds while also having extremely rate-sensitive, quick-moving, well-informed customers.


While depositors with balances exceeding FDIC-insured limits seem to be in the clear this go-round, the failure of Silicon Valley Bank should be a cautionary warning to everyone.


  • Dennis McNamara, CFP®, CHFC®, AIF®, CSLP®

    Today, as co-founder of wHealth Advisors, I find immense fulfillment in knowing that we use our platform as a force for good. As a firm, we’re founded on the industry’s highest standards for ethics and transparency while also offering pro-bono services to those in need. Financially, we donate a portion of our gross revenue annually to qualified 501(c)3 organizations (which are nominated + voted on by our clients). Personally, though, I find the greatest satisfaction in helping my clients gain financial peace of mind through prudent money management. Prudent money management is like a positive feedback loop: when we are no longer burdened by finances, other dimensions of our lives also tend to improve. As we continue to grow we realize that as important as money is, those other dimensions of life are equally (if not more!) important. As modern philosopher Naval Ravikant reminds us: “The three big ones in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse. A calm mind, a fit body, and a house full of love. These things cannot be bought.” My life’s mission has been dedicated to helping others use money to close the gap between who they are today and the best version of themselves that awaits ahead. I am excited to meet you and look forward to the opportunity of working together on your journey to financial independence! Designations: - Certified Financial Planner™ - Chartered Financial Consultant® - Accredited Investment Fiduciary® - Certified Student Loan Professional® Featured in: - Forbes - U.S. News & World Report - Financial Advisor Magazine Outside of wHealth Advisors: - Educating myself more on: Stoicism, permaculture, climate justice, systemic racism, health & longevity science - Happiest when: outdoors with wife, Arabelle, and son, Manny - Stays active with: strength training, functional range conditioning, hiking, cycling, surfing, and yoga - Financially splurges on: Single-origin coffee

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