About monetary policy, SVB, and bank quakes

Dirk Ehnts

International Journal of Pluralism and Economics Education, 2023, vol. 14, issue 1, 47-54

Abstract: The demise of Silicon Valley Bank (SVB) has reminded us of the financial crises of the past. While during the global financial crisis credit risk was the problem, banks are now hit with interest rate risk. SVB seems to have ignored basic principles of risk management, as an increase in interest rates was bound to happen sooner or later. The episode nevertheless has reopened the debate of how to regulate banks and how to run macroeconomic policy. It seems that fiscal policy will replace monetary policy once again as the major instrument with which to stabilise the economy.

Keywords: macroeconomic management; banking supervision; Silicon Valley Bank; SVB; fiscal policy. (search for similar items in EconPapers)
Date: 2023
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