Risk Analysis of American Banking and Regulatory Systems Based on Silicon Valley Banking Events

On March 8, 2023, Silicon Valley Bank (SVB) announced an after-tax loss of 1. 8 billion and a refinancing of 2. 25 billion. SVB's move sparked panic in the market and an attempt to withdraw 42B in March 9. SVB declared bankruptcy on March 10. This paper analyzes the SVBs bankruptcy in three different levels. First, the risk that exposed in the SVBs assets and liabilities allocation which directly leads to liquidity crisis and the SVBs failure. Second, the paper analyse the case based on a macro factor, the fed rate hike. Third the paper indicate the risk exposed in executive level, for instance operation risk in executive layer. The paper indicate that the underlying cause of the bankruptcy is that managers fails to balance short-term profits with long-term development. The paper then discuss the current structure and the features of banking system in US and point out the risk of the USs banking system based on those features.