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The Failure of Silicon Valley Bank and the Panic of 2023

Author

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  • Andrew Metrick

Abstract

The failure of Silicon Valley Bank on March 10, 2023 brought attention to significant weaknesses across the banking system, leading to a panic that spread to other vulnerable banks. With subsequent failures of Signature Bank and First Republic Bank, the United States had three of the four largest bank failures in its history occur over a two-month period. Several features of the Silicon Valley Bank failure make it an ideal teaching case for explaining the underlying economics of banking (in general) and banking crises (specifically). This paper tries to do that.

Suggested Citation

  • Andrew Metrick, 2024. "The Failure of Silicon Valley Bank and the Panic of 2023," Journal of Economic Perspectives, American Economic Association, vol. 38(1), pages 133-152, Winter.
    • Handle: RePEc:aea:jecper:v:38:y:2024:i:1:p:133-52
    DOI: 10.1257/jep.38.1.133
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    Cited by:

    1. Olivier Armantier & Charles Holt, 2024. "Can Discount Window Stigma Be Cured? An Experimental Investigation," Staff Reports 1103, Federal Reserve Bank of New York.

    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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