短短48小时，硅谷银行倒闭！美国金融业现2008年以来最大倒闭案！（附视频&采访稿）

Yellen saying she has full confidence in the banking regulators. 

The FDIC has come in, taken control at Silicon Valley Bank and will oversee the  sale process. Do you have that confidence based on  your experience in this area? I do like the FDIC has done a great job  in handling and resolving institutions, actually, but generally speaking,  they're able to do so at a small cost to taxpayers and tend to recover a lot for  uninsured depositors. But each bank failures a little bit  different. Keep in mind, this bank was overseen at  the federal level by the Federal Reserve. 

The Federal Reserve Bank of San Francisco was Silicon Valley banks  number one federal regulator. And so the San Francisco Fed should have  been on top of what was going on, the banks explosive growth. 

And now it's very quick failure. But there are a lot of tools. 

The FDIC has to handle this resolution situation. 

And I do think there's confidence that there's a large bank, 16th largest bank  in the country. Yeah, but it's not your typical bank. 

It's only a 16 branches. It's a very different structured bank  than most of its peers around that same size. 

Just to bring you the breaking news that continues to unfold, we currently  understand that SVP financial group, perhaps unsurprising news can be removed  from the S&P 500 as an index insulates the company that will replace it. 

But just talk us through what got us here ultimately and whether the  regulations that you have been so crucial in forming in many ways and  analyzing the repercussions thereof, whether they're the right regulations,  the right ways in which banks currently hold capital, but in some ways can lead  to extraordinary circumstances that we find with SBB. 

Right. So let's start with the premise. 

My premise is banks should fail. We have nearly 5000 banks in America and  a healthy amount of failure is greater than zero. 

I was more concerned the last two years when not a single bank failed. 

By the way, the first time in American history we went a year without a bank  failure was 2005. Regulators told us the banking system  was in great shape and not a single bank failed again in 0 6. 

Whoops. So a little bit of failure is actually a  desirable thing, not something to be afraid of. 

The question is when when an institution fails, is that failure contained?  Who bears the losses of it? And how quickly can this situation be  resolved? And in that situation, I think the  regulatory tools the FDIC and the Federal Reserve and other regulators  have now are light years ahead of what they had in 2007 and 8 when the cause of  the crisis was very different. Aaron, a lot of people out there have a  lot of questions, principally startup founders who were banking with Silicon  Valley Bank when the FDIC comes into an institution in this situation. 

What is their priority? You look at the chart on the screen, you  can't even see it on the right hand side because this is the first technical FDIC  failure in a very, very long time in the first of this year. 

So while Silver gave bank is is another bank that failed very recently, if you  want to call it a technical failure or not, sometimes the FDIC is able to  negotiate purchase and assumptions here where other banks take the assets of the  other bank. The FDIC is number one priority or the  retail customers and the insured depositors who are going to be able to  have access to their money almost like nothing happened. 

There's just a bit of a rebranding. That's their number one priority. 

Uninsured depositors, businesses, their number two priority is to try to  maximize the ongoing value of the institution to minimize the loss felt by  everybody, including uninsured depositors. 

But I want to point something out here, and I hope we get a chance to discuss  it, which is the FDIC isn't the first person to have a claim. 

If you think about who owes to who has a claim on this bank's assets. 

The FDIC is number two. Number one is this kind of arcane part  of the government called the federal home loan bank system. 

And the federal home loan Bank of San Francisco has lent more money to us, to  Silicon Valley Bank than to any other bank. 

They did business with its time of its failure. 

OK. So dig in. 

Fall, you've done analysis on what other company it's what the lenders have,  perhaps exposure to the home loans element of things. 

Are we likely to see a contagion risk? What's ultimately going to be the  likelihood of also the uninsured companies, the likes of road that comes  out says 26 percent with cash balances all over and in Silicon Valley banking  and ultimately aren't insured. What are the ripple effects?  So there are a couple of things. Number one, the people that run to the  home loan bank system that are heavy users of it, particularly that come  very, very quick. A year ago, Silicon Valley Bank didn't  even appear on the top list of borrowers from the federal home loan Bank of San  Francisco. And, you know, within a year they did  vaulted to, number one, 20 billion dollars of outstanding advances, silver  gate. At the time of its failure had over four  billion dollars of outstanding advances to look at the list of other people that  have started leaning very heavily on the home run bank system. 

And you asked the question, why? Why are they going there, particularly  bank like Silver Bank, which isn't really making mortgages. 

Right. The purpose of the home loan bank system  originally when you go back a hundred years, it was supposed to be a Federal  Reserve kind of for these things called thrifts that used to make mortgages when  America, a very different banking system and a bank in a thrift work were  different things. So I kind of look there. 

That's a classic red flag. If you go back to 2007, Countrywide,  Washington Mutual, all of those folks were the ones that were running to the  home loan bank system in 0 7 long after the market had started to dry up on the  asset that they were overinvested in.

It was quite a back and forth week. We had the Powell testimony that seemed to go higher. We had the jobs numbers and then we had the SVP situation. What do you make of all of it? Look, I think that the overwhelming thing that happened this week was the receivership of SB Bank. Right.

It's a it's one of the largest bank failures that we've had since the financial crisis. It's the 16th largest bank in the US.

I don't think that the issues that you see with SBB are systemic.

I would agree with what Larry Summers has said earlier.

However, I do think it was an opportunity for everyone in the market to take a very big pause today and really think about their positions and think about their liquidity, which is why you saw some of the less liquid parts of the market really get hit much harder today, like small cap stocks and high yield bonds. Also, we know we're down pretty dramatically today. So, Sara, even if it's not systemic, is it possibly a canary in the coal mine as they talk about that, although it may maybe just as maybe they got special situations, the underlying circumstances could be reflected in other parts of the economy as well as, frankly, financial markets? Well, David, one never knows what.

But Silicon Valley Bank did have a very concentrated corporate deposit base.

And so there are other regional banks in the U.S.

Their deposit bases in general seem to be much more diversified.

So that's one of the primary reasons why this may not be systematic.

But confidence is crucial for banks. And there doesn't appear, especially given the likelihood that Silicon Valley bank depositors will be made whole. Any reason for this to spread through the banking system, which could be a reason to be looking at some of the other banks as as investments given they're selling off so rapidly? Well, it wasn't even. I don't think as a practitioner of zero, by the time it started sort out, it looked like the regional banks were getting hit harder than the big money center banks.

Does that suggest that some of the regional banks may be opportunities for investors, rather? It does depend on what they hold if in their asset. Bases, they have a huge amount of commercial real estate, particularly office, that could end up being very problematic. What we're all really talking about here is a new era. Interest rates are rising and until they stop rising in full again, there's a complete new view on credit.

Credit is going to be very difficult to obtain.

We're in a credit crunch. So whether you're in real estate and you have a tough time with occupancy or or you're a technology banker, this is this is a whole different environment. So be really careful if you're looking at regional banks, make sure they're trading down at their tangible book value book, less goodwill. But that's really solid ground.

There's nothing else could go terribly wrong in their assets out of their balance sheet. But what other parts of the economy in a business are interest rate sensitive in this sense? Because we've had a long regime, frankly, a pretty low interest rates.

That seems to be gone, right? Well, look who's benefited the most from very low interest rates. The real estate sector was probably the first one. Right.

That's the single biggest beneficiary of it.

You'd have to also take a look at the private markets, private credit, private equity, private real estate all benefited from very low rates.

So, you know, the the fact that you have is drying up liquidity.

The Federal Reserve has been raising interest rates aggressively for the past 12 months. They're trying to slow down the economy.

And when you slow down the economy, certain things break just like cryptocurrency broke last year. Then you had the problems in the gilt market in the UK and now you have a U.S. bank that's just failed.

Try to slow down their Covid. How much, Barbara, are we going into recession as a broken matter? Because inflation seems to be more durable than people thought. They're going to have to step on the brakes so hard that we have to go into recession.

I don't think there's a recession on the horizon over the course of the next 12 months. Right.

There's a very long lead time between policy implementation when you're raising interest rates and when you go into recession.

The US economy is extremely strong, right? You had three hundred eleven thousand jobs printed this past month.

While it looks like the labor market is starting to ease a bit and weaken a little bit, I would say that the U.S. economy is a very durable supertanker.

It would probably take a seismic shock of some sort in order to derail it at this point. And I don't think SBB is that shock.

Sara, you specialize in equities, in particular investing in equities when it comes to equities. What is your base case on that recession? And more importantly, does it matter? Does it really affect which equities you invest in, whether you think there's going to be a recession or not? It matters if a stock does, nobody price in some slowing. There's no doubt.

I mean, my colleagues and I really do believe that the Fed is intent on slowing the U.S. economy in the same with the European Central Bank. Maybe they're a year behind the Fed and at some point time, maybe the Japanese will tighten monetary policy with a new central bank head. So there's a there's a lot of tightening out there. And the other side of that is typically economic slowing. That's what brings down inflation.

And inflation is the target. So we're expecting some element of slowing it. It may be severe.

It's hard to know. But what we do know is what's priced into stocks and not all stocks, but in certain areas that many of them have already discounted in economic slowing. Not all the cyclicals, for example, but there are there are some industries that have and that's the opportunity where it's already priced and then we can have it.

And then the worst can happen. And the stock has nowhere to go but up.

Boral's play the parlor game. What do you think the terminal rates gonna be for the Fed to get inflation down to where it needs to go? I don't think it's as high as probably what the market's pricing in.

I think maybe the Fed Reserve has to tighten one, maybe two more times if that, and then be done. The reason is the way that you price in a higher terminal rate is either you have a faster labor force growth or faster productivity growth. The U.S.

doesn't have any thought, any thought showing of that being the case at this point. So for us, we do not believe that our star is 6 percent or something above there at this point.

I don't think that the US economy can grow so fast or it's been such a dramatic change that it's been over the past 20 years.

So we don't think that rates have to go much higher at this point.