SVB did not have adequate liquidity to tolerate a bank run and did not have adequate solvency to meet its liabilities. Emphatically, however, the failure did not occur because there was too little liquidity in the banking system as a whole. It occurred because there was too much.
At the end of 2022, the US banking system had $18tn in domestic deposits, including an estimated $10tn of deposits insured by the Federal Deposit Insurance Corporation.
That meant there were $8tn of deposits that exceeded the FDIC insurance limit.
John Hussman FT 24 April 2023
Why is it so hard to accept that speculative bubbles can burst?
John P. Hussman, February 2022
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