In just 48 hours the banking sector has experienced the collapse of two major U.S. banks — Silicon Valley Bank (SVB) and Silvergate. SVB serviced the tech industry and Silvergate, the cryptocurrency industry, both of which were so-called growth economic sectors. Questions and fears are rising that SVB’s and Silvergate’s issues could be a contagion to other regional banks failing, especially when customers lose confidence and rush to the bank to withdraw their money. Economist Peter Schiff tweeted, “The U.S. banking system is on the verge of a much bigger collapse than 2008. Banks own long-term paper at extremely low interest rates. They can’t compete with short-term Treasuries. Mass withdrawals from depositors seeking higher yields will result in a wave of bank failures.”
