Silicon Valley Bank (SVB) crash & the deadly cocktail of deposits-bonds-interest rates & imprudence 

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Raghuram Rajan says banks in US are crashing at the Christian rate of Collapse . . . . .

I was born in Sri Lanka, now a citizen of Singapore. I'm a Tamil, never steped foot in India. But why do I feel whenever Guptaji is speaking, as if I'm listening to my grandfather's stories under the moonlit sky 🤔 Long life Guptaji 😊

Time for Raghuram Rajan to be a board member of SVB ?

$73,450,000 rs donated to BLACK LIFE MATTER. bank became woke and started donated money to BLM leaders .how can bank donate public money

I don't know the first thing about finance, economics or banking. Yet I understood this. There lies your greatness. Thank you so much Professor.

With all this scary news making the headlines, is this really a good time to buy stocks? I know everyone says the market is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery?

Channel called THINK SCHOOL explained SVB crash beautifully 😅

Shaktikanta Das > Michael patra >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Raghuram Rajan ☺️

This is pure gold 🪙.....Thank you SG sir for such a lucid explanation ♥️

Wow, these things should be taught in school, thanks shekhar Gupta ji this is very informative

Hindenburg/ Soros/ R Rajan/ R Kumar left the chat 😛😛

Karma for trying to Destroy economies of other countries and Bharat. They think they can get away with it? Karma will always take care

SG will talk on anything to avoid talking about Pappu's UK trip...😅

As things are unwinding after COVID, there is more and more proof that Nirmala ji handled Indian economy very well! Wise decision not to dole out free money against the trend and against the pressure of such expectations that time. I think she is not getting credit she deserves from analysts.

SVB crashed because the Risk head was arranging woke events 😅

I am suspired how hindenburg missed to report that SVB is going to collapse!!!

Brilliantly put across Shekharji... After Central Politics, North India Politics, North East Politics, Middle East Geopolitics and CORONA, you can add Banking regulation to your Forte (pun intended). Thank you for this CTC, well researched and put across in the most simplistic manner.

several banks have failed since SVB, hindenburg couldnt predict the downfall in its own backyard. the short seller is not allowed to report on new york listed entities. the royalist who jumped on adani over hindenburg report a name they never heard before, should rethink. adani, ambani, patanjali all are doing okay and will thrive. all were jumped in a gap of a couple of years by vested interest. most people dont understand investments and just follow like sheep. i got some ambuja cement for me, thanks to hindenburg report for cheap. will see how it goes in 6 months, already gained 3% in a few weeks.

Rating of US Economy would still be AAA+ by S&P, Flitch, World Bank. Despite of being 2 major Bank failures 🤣🤣🤣🤣

Hindenbrg is like chiraag taley andhera 😂😂

Who in right mind would invest in bonds when the interest rates are at almost 0%.

Hope Raghuram Rajan predicted this like he predicts about Indian institutions

Brilliantly explained. The best teacher is the one who learns and understands the topic himself before teaching others. Shekhar you fall in the category of best teacher.

Thank you Shekhar Ji for your excellent coverage!

Working 12 years for svb never occurred it will be feature here for all wrong reason 😢

Why banks failed? A naked & drunk woman boards a cab in America. Driver of the cab, a Gujju, keeps staring at her and does not start the cab Woman: Haven’t you seen a naked woman before? Gujju: cool down. I am not staring at you. I am just wondering where have you kept the money to pay me? Moral: This is what most of the banks failed to do. Assessing the repayment capacity before enjoying exposure… SVB's problem. 🤣🤣

Indian Govt's investment in US Long dated Bonds must have suffered losses. The RBI has not made any disclosures about this.

Sir, you missed the funniest part about this whole saga. The hilarious rumours and subsequent confusion with Shamrao Vithal Bank (SVB) of Maharashtra. They had to put out a clarification eventually, LOL.

Hand movement is distracting from concentration upon the report….I don’t appreciate

If he taught in my college I would never miss even a single class. pure phenomenal

*HSBC bought SVB for either 1 $ or 1 £ pound sterling ...*

Thanks a lot for explaining this so well!!

SEKHAR SIR , IS THERE ANY POSSIBILITY ADANI GROUP WILL BUY #SVB OR #ISSB OR #SWISSIEBANK ?

When are you going to say Modi is to blame and demand JPC

The basic issue here is the enormous rise in fed's interest rate from .25% percent to 5%. It's basically bad Fed decision making which has led to these rampant failures - the latest being Credit Suisse. Massive QE during covid basically lead to this.

We are more interested in others than our own problems

The net effect of this periodic nonsensical banking crisis is that many banks lose a lot of their shareholder value and finally going belly up. Instead of this, Govt should do the simple thing- offer current, saving and FD accounts in a Govt bank ( along with participation in payment system) with 100% risk free guarantee of deposits and reduce its borrowing via Treasuries to that extent. This way, depositors have 3 choices- 100% risk free , risk free up to limit of deposit insurance, say 5 lacs rupees and then 100% risky deposits! This way, if a bank fails, usual chest beating and shouting will not be seen, as every one chose one of the 3 ways of deposit keeping, as per own's rational choice! It will be much easier to deal with such crisis, if it occurs.

If you want to find how Economies work, what roles do Banks play in it etc, "Talking to My Daughter about the Economy" by Yanis Varoufakis is a good read you could consider. He explains the concepts as if explaining to his nine year old daughter. He does so without getting too technical and with help of stories and examples which even a child can relate to. Helped me a lot. On a side note, also reminded me of 11th century book "Lilavati" by Bhaskaracharya II which is also in the same conversational style. From what I have heard, it contains a conversation between a father, a mathematician, and his daughter Lilavati, teaching her the concepts of Mathematics. Yet to read that one.

Sir, very nice explaining. May I request you to make a video, about cost spent in caring for persons in last one year of life in India? This bankrupts many families.

Its surprising how such learned bankers failed to sell their bonds earlier and shift to newer bonds with higher rates of interest.

I'm preparing for public sector jobs, this is the best news channel to watch. I never miss even a single show of SG sir 🙏

👏🏻👏🏻👏🏻 excellent explanation sir

The requirements imposed by Basel III, which they lobbied for exemption from, were that SVB hold sufficient liquid assets to handle 25% of their deposits leaving over a 30-day period. But 24% of deposits left on Thursday alone, so this regulation would have changed nothing. Inaccurate information, sir.

Thanks to you SG sir, you piqued my interest in Economics, Finance, and Politics.

Thank you so much sir, for explaining the bond market price and interest rate linkage. This was a puzzle for me since ages.

I don't think regulations are the solutions. In fractional reserve banking, you would lose all of your deposits even some percent of your loans or investment fails.

SG ji has revised my All money and banking concepts for upcoming UPSE prelims. 🙏🙏

Usa banks collapse is mainly because of liquidity, increase of int from 1 to 6% resulting mis management. Here in hindustan int range is between 4 to 7% and with experienced rbi head, cleaning of banks, survival during tough covid time, we will sail smooth compared to any economy in the world.

Great SG, hats off to you. Governments should come out with floating interest long term bonds.

Wonderful explanation on bank financial matters. Understood bonds rates come down when interest rates go up. 2. Now ,SBI, FDR rates in India has gone up. Hope, proper vigilance & expertise are on.

It may not be a collapse based on bribes, bad loans for kickbacks, but such careless investments by an entity as banks is also equally criminal.

If Modi Govt. Is Supporting only Cronies, Than How Did India's Total no of Billionaires Explode from just 40 Billionaires in 2014,(mostly inherited), To 166+ Billionaires(New-age self-made Tech Entrepreneurs) in 2022 and Rising So fast that India had Created a Billionaire per every 11 DAYS in 2022 only behind the US with 2 bills, In last 8 years Under Modi Govt, The Number of New Startups in India Exploded from just 500 in 2015, To a Whopping 90,000 Startups in early 2023, Which is the 2nd Highest in the World and these Startups received a massive $ 450 Billion dollars in Fundings since 2015, And The Unicorns exploded from just 5 in 2014, To World's 3rd highest 114+, And India created More Unicorns than China in 2022, And The Gap is Massively Reducing and All this led to The Rise of 100,000's of Male and Female Entrepreneurs with a Rising hope under Modi Govt pro-Liberal Economic Policies, Foreigners Increasing Trust on India and it's Economy since 2014,This led to The Rise of Entrepreneurs and Billionaires under Modi Govt and They are Being Created in New age Fastly Growing Tech Cities Like Bangalore, Gurugram, Pune, Hyderabad and Noida etc which have Become Silicon Valley, Seattle,LA and SF of India with Technology as their Bases away from Traditional Financial and Industrial Cities like Mumbai, Kolkata, Chennai and Delhi Which have Become New York, Pennsylvania and Illinois of India with Manufacturing Industrial Bases

If Modi Govt. Is Supporting only Cronies, Than How Did India's Total no of Billionaires Explode from just 40 Billionaires in 2014,(mostly inherited), To 166+ Billionaires(New-age self-made Tech Entrepreneurs) in 2022 and Rising So fast that India had Created a Billionaire per every 11 DAYS in 2022 only behind the US with 2 bills, In last 8 years Under Modi Govt, The Number of New Startups in India Exploded from just 500 in 2015, To a Whopping 90,000 Startups in early 2023, Which is the 2nd Highest in the World and these Startups received a massive $ 450 Billion dollars in Fundings since 2015, And The Unicorns exploded from just 5 in 2014, To World's 3rd highest 114+, And India created More Unicorns than China in 2022, And The Gap is Massively Reducing and All this led to The Rise of 100,000's of Male and Female Entrepreneurs with a Rising hope under Modi Govt pro-Liberal Economic Policies, Foreigners Increasing Trust on India and it's Economy since 2014,This led to The Rise of Entrepreneurs and Billionaires under Modi Govt and They are Being Created in New age Fastly Growing Tech Cities Like Bangalore, Gurugram, Pune, Hyderabad and Noida etc which have Become Silicon Valley, Seattle,LA and SF of India with Technology as their Bases away from Traditional Financial and Industrial Cities like Mumbai, Kolkata, Chennai and Delhi Which have Become New York, Pennsylvania and Illinois of India with Manufacturing Industrial Bases

If Modi Govt. Is Supporting only Cronies, Than How Did India's Total no of Billionaires Explode from just 40 Billionaires in 2014,(mostly inherited), To 166+ Billionaires(New-age self-made Tech Entrepreneurs) in 2022 and Rising So fast that India had Created a Billionaire per every 11 DAYS in 2022 only behind the US with 2 bills, In last 8 years Under Modi Govt, The Number of New Startups in India Exploded from just 500 in 2015, To a Whopping 90,000 Startups in early 2023, Which is the 2nd Highest in the World and these Startups received a massive $ 450 Billion dollars in Fundings since 2015, And The Unicorns exploded from just 5 in 2014, To World's 3rd highest 114+, And India created More Unicorns than China in 2022, And The Gap is Massively Reducing and All this led to The Rise of 100,000's of Male and Female Entrepreneurs with a Rising hope under Modi Govt pro-Liberal Economic Policies, Foreigners Increasing Trust on India and it's Economy since 2014,This led to The Rise of Entrepreneurs and Billionaires under Modi Govt and They are Being Created in New age Fastly Growing Tech Cities Like Bangalore, Gurugram, Pune, Hyderabad and Noida etc which have Become Silicon Valley, Seattle,LA and SF of India with Technology as their Bases away from Traditional Financial and Industrial Cities like Mumbai, Kolkata, Chennai and Delhi Which have Become New York, Pennsylvania and Illinois of India with Manufacturing Industrial Bases

If Modi Govt. Is Supporting only Cronies, Than How Did India's Total no of Billionaires Explode from just 40 Billionaires in 2014,(mostly inherited), To 166+ Billionaires(New-age self-made Tech Entrepreneurs) in 2022 and Rising So fast that India had Created a Billionaire per every 11 DAYS in 2022 only behind the US with 2 bills, In last 8 years Under Modi Govt, The Number of New Startups in India Exploded from just 500 in 2015, To a Whopping 90,000 Startups in early 2023, Which is the 2nd Highest in the World and these Startups received a massive $ 450 Billion dollars in Fundings since 2015, And The Unicorns exploded from just 5 in 2014, To World's 3rd highest 114+, And India created More Unicorns than China in 2022, And The Gap is Massively Reducing and All this led to The Rise of 100,000's of Male and Female Entrepreneurs with a Rising hope under Modi Govt pro-Liberal Economic Policies, Foreigners Increasing Trust on India and it's Economy since 2014,This led to The Rise of Entrepreneurs and Billionaires under Modi Govt and They are Being Created in New age Fastly Growing Tech Cities Like Bangalore, Gurugram, Pune, Hyderabad and Noida etc which have Become Silicon Valley, Seattle,LA and SF of India with Technology as their Bases away from Traditional Financial and Industrial Cities like Mumbai, Kolkata, Chennai and Delhi Which have Become New York, Pennsylvania and Illinois of India with Manufacturing Industrial Bases

Shekhar Gupta is Outdated, Vedanta Is Now Entering into The Powerful SEMICONDUCTOR manufacturing with a Whopping $ 20 Billion USD investment in Gujarat after The Modi Govt's Decision to Subsidize Semiconductor Manufacturing and Gujarat Also announced Water and Electricity Subsidies for The Same Scheme, It is one of the Single largest Investment Projects in the World, Becoz Even TSMCs New Plant in the US also costs around $ 20 billion dollars

Shekhar Gupta is Outdated, Vedanta Is Now Entering into The Powerful SEMICONDUCTOR manufacturing with a Whopping $ 20 Billion USD investment in Gujarat after The Modi Govt's Decision to Subsidize Semiconductor Manufacturing and Gujarat Also announced Water and Electricity Subsidies for The Same Scheme, It is one of the Single largest Investment Projects in the World, Becoz Even TSMCs New Plant in the US also costs around $ 20 billion dollars

Shekhar Gupta is Outdated, Vedanta Is Now Entering into The Powerful SEMICONDUCTOR manufacturing with a Whopping $ 20 Billion USD investment in Gujarat after The Modi Govt's Decision to Subsidize Semiconductor Manufacturing and Gujarat Also announced Water and Electricity Subsidies for The Same Scheme, It is one of the Single largest Investment Projects in the World, Becoz Even TSMCs New Plant in the US also costs around $ 20 billion dollars

Shekhar Gupta is Outdated, Vedanta Is Now Entering into The Powerful SEMICONDUCTOR manufacturing with a Whopping $ 20 Billion USD investment in Gujarat after The Modi Govt's Decision to Subsidize Semiconductor Manufacturing and Gujarat Also announced Water and Electricity Subsidies for The Same Scheme, It is one of the Single largest Investment Projects in the World, Becoz Even TSMCs New Plant in the US also costs around $ 20 billion dollars

In accordance with LCR and NSFR regulations, what President of USA told is correct...It's bank management solely responsible for this mischief..

Fantastic CTC, while Hindenburg was busy analysing Adani on his back market of his own country was falling apart.

1) Any Bank, how much ever healthy & strong, will collapse if even 1/3rd of depositors demand immediate return of their money. 2) the liquidity ratios are similar to the CRR & SLR stipulated by RBI to Indian Banks. There is a cost to them as either the banks earn no Interest on cash held by them or low interest on those liquid securities invested by them. An optimal balance between liquidity & interest income has to be arrived at. 3) From what SG says, SVB collapsed not due to fraud but as a result of withdrawals from depositors consequent to rise in interest rates...I think maybe the more important reason is that most of the depositors belong to one industry/class - Investors in start ups, VCs, New Economy Companies, etc. So the rise in interest rates effected all of them the same way. Maybe if the depositors are of all classes of the society like other banks, then this situation wouldn't have risen. 🤷‍♂️

We simply think that For 1% change in interest rate of bond, for face value of 1000, the change should only be 10. Why did the bond go to 925 instead of 990? Because the bond term will be longer like 10/20/30 years periods and the time factor will also be included.

‘The US banks are becoming Christian’ Raghuram Rajan (ie only Jesus can save them) …the comment that Rajan should have made BUT didn’t 😂😂😂😂😂

" All that glitters isn't that gold . It doesn't just end there. Much trouble lies ahead for USA " - Renown US economist Michael Hudson...

Uncleji one advice. Please stop making videos on economics/finance if you don't understand it. There are many youtubers who are doing better job please give some young reporter a chance. Stick to politics and stop embarrassing yourself and print

The fall out in this instance will only be felt by regional and smaller banks. The big boys who are subjected to all manner of stress tests should be fine. Then again, being America, hopefully no Congressman issued waivers to the big boys.

Also SVB attracted depisits at 2.22% when other banks are giving at 1.6%. You have to lend risky loans to achieve that.

"purely an America problem" - it's both funny and sad how frequently that phrase gets repeated in many discourses...

Very easy to understand and clear explanation of the crisis. Thanks you

Here is a business model for you .. prepaid account each video costs some money .. if a person watches more then50% print diduct some amount it’s a win win .. market play at its best instead of monthly charge pay per view

Woke bank

To know & understand more about USA listen to Michael Hudson - American economist....

This is reason people are blaming US federal banking system as responsible for this washout. To control inflation increased bond interest rates. Some bad decisions too late .. as per a novice like me

Thank you for decluttering this chaos for our simpler minds :)

Very complicated topic explained in a simple way. Thank you Professor Gupta

Was just waiting for this one. Thank you SG !!! As it happens most often you didn't disappoint 👍

This tell's us not to leave everything in the hands of private market players this is why government becomes necessary

We have been listening to the same prelude many a time…. Request if it can be shortened… time is at premium for one and all.. hope it is taken in the right spirit

there is another point . Banks when invest in bonds do a hedge on it . This is where SVB missed to save money on paying interest on hedge. so when bonds fell they did not have a hedge against

By not mentioning the tenor of bond in example you have increased the viewers insecurity. 😢

Mind-blowing 🥰 session shekhar sir 🌟💙 thaankuuu so much 💖

Outstanding explanation of what happened! You’re a quick student!

Mr. Shekar. You are too repetitive. People who see this video know all details of bonds.

Many thanks for clarifying the inverted relationship between bonds & interest rates !

People interested in this subject can watch the movie ,margin call.

The CEO sold shares of 3 Million in last month 😅 and said the bank is doing well

All banks run on fractional reserves CRR RATIO is a fancy term for the limit of fraction of deposits allowed for Indian Banks by RBI. The simple fact is that all banks in the world will fail if depositers all at once want to withdraw their money. Even HDFC, JP Morgan Chase etc., cannot survive a bank run. Only hedge against this is crypto currency, which you and all the politician and RBI uncle jis keep cursing all the time. So while most equities are down 20-30% in the past six months BTC is up 30-40%. Moral of the story, treat all asset classes unemotionally and rely on Mathematics... Do not get emotional with any asset class

More than 90% startups fail. Svb was destined to lose.

No word is mentioned about Hindurburg type of things.

Punjab Maharashtra co operative Bank ke customer ko kab nyay milega

Nothing new ... same as in the 2008 financial crisis. As interest rates were pumped up, banks collapsed. Global economy is entering a prolonged gloom. Good news for India maybe

Sometimes the teachers from non financial world are better than from the industry, I would recommend all MBA finance student to see this video by Shekhar Sir.

why marked to market can in turn the result in need for capital raise?

Very good ,INDIAN START-UP DESERVE THIS!

I just came across this video and I am glad that I opened it. Thank you for explaining it so nicely. Now I am planning to go through cut the clutter playlist!

Brilliant explanation Sir. Thank you.

Thanks a ton for explaining such a complex problem in simple way. I tried other platforms also- my mind became more cluttered

I am more worried about collapse of Indian banks. As now yearly interest rate on dollar FD is 5 % and INR deprecates by 6 % ( last yer INR declined by 11%) giving a risk free return of 11% . Better than what any bank gives in India