Death came for Silicon Valley Bank the way it almost always does for doomed banks: by depositors fearful of losing their money rushing for the door. But that mortal moment, which unfolded a year ago this week, was the culmination of a process that started long before. The killer – a disjointed system that is supposed to oversee, save or wind up U.S. banks but in practice struggles to do any of the three – is still at large. With the benefit of hindsight, California-based SVB Financial was a compendium of problems in the making. It had grown extremely quickly by

It’s a truism that the United States has too many banks, and even after the collapse of four lenders this year the country could stand to lose a few more. But while the latest count of nearly 4,100 institutions may be excessive, it’s not always true that bigger is better. One example is $1 billion Live Oak Bancshares, which flouts many preconceptions about what it means to be a tiny U.S. bank. Founded in 2008 by former Wachovia banker Chip Mahan, Live Oak was until recently spoken of in the same sentence as Silicon Valley Bank – the lender that rocketed to

Big decisions are best made in calm times. That’s not an option for regulators cleaning up the mess caused by the collapse of two U.S. banks in March. A one-off charge levied on big lenders to cover the cost of those failures is a taster of the kind of trade-offs watchdogs and politicians must juggle. Winding up Silicon Valley Bank and Signature Bank left a $15.8 billion hole in the fund the Federal Deposit Insurance Corporation uses to pay back savers when a lender implodes. Because regulators bailed out uninsured depositors – customers with balances above $250,000 – the rules require the FDIC to fill the

If there’s one thing the financial elite who attend the Milken Institute conference in Los Angeles know how to do, it’s turning crisis into opportunity. So it makes sense that a string of U.S. bank failures, deep cracks in the real estate market and the prospect of a coming recession are giving the capitalists a fresh lease on life. The annual event conceived by junk bond king turned philanthropist Michael Milken, who was imprisoned for securities-related crimes in the early 1990s and later pardoned by then-President Donald Trump, is a place where the rich and influential let it all hang out. Guests pay at

Britain eliminated wolves well over a century ago, hunting them out of existence because they preyed on sheep, and sometimes humans. One consequence is that deer, with no apex predator, exploded in number, overgrazing land and killing off biodiversity. There are now calls to bring wolves back. There is a lesson here for the financial system. Curb one pest, and you might encourage another. Here’s how that story applies to the collapse of Credit Suisse and Silicon Valley Bank. Fifteen years ago, it became clear that lenders’ habit of funding themselves generously with fickle, short-term borrowing from financial investors had