How one bank’s collapse reflects a broader anxiety in Silicon Valley
Most Americans were probably familiar with Lehman Brothers when the storied investment house collapsed in 2008, a victim of bad bets on soured mortgage-related investments.
But relatively few would ever have heard of Silicon Valley Bank, the country’s 16th largest before it was seized Friday by the Federal Deposit Insurance Corporation, a banking regulator.
Silicon Valley Bank’s demise on one level is a straightforward tale of a financial screwup. A massively bad bet on interest rates caused painful paper declines in its investments, forcing the bank to sell securities at...