From WSJopinion: On one level, SVB is a saga of bad management. But there is a story behind this saga, writes William Galston.
Journal Editorial Report: The week's best and worst from Kyle Peterson, Mary O'Grady and Dan Henninger. Images: Charleston Gazette-Mail/AP/Getty Images Composite: Mark KellyMartin Gruenberg, chairman of the Federal Deposit Insurance Corp., delivered remarks March 6 on the state of the banking system to the Institute of International Bankers.
Silicon Valley Bank’s collapse four days later, followed swiftly by Signature Bank, another midsize financial firm, validated his concerns. Depositors’ confidence in the soundness of these institutions evaporated, generating a classic bank run that led federal regulators to step in. Over the weekend, regulators decided to guarantee depositors for the full amount of their accounts, though the formal FDIC guarantee is capped at $250,000 per depositor.
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