Question
1.1.By extracting evidence from the article, critically discuss FIVE main factors that contributed to the collapse of Silicon Valley Bank1.1.By extracting evidence from the article,
1.1.By extracting evidence from the article, critically discuss FIVE main factors that contributed to the collapse of Silicon Valley Bank1.1.By extracting evidence from the article, critically discuss FIVE main factors that contributed to the collapse of Silicon Valley Bank 10 Marks 1.2.The aggressive venture attitude of Silicon Valley Bank (SVB) as evidenced by the use of short-term liabilities (customers deposits) to buy long-term assets (corporate and government bonds) with the aim of profiting from the interest rate difference, resulted in a maturity or tenor mismatch. Essentially, by investing shortterm deposits into long-term bonds, SVB committed a bunder in interest-rate-risk management such that when interest rates rose, the value of the bonds fell, wiping out the equity of the bank. The observation above suggests that poor working capital management at SVB was primarily responsible for the failure of the bank. With the aid of appropriate diagram, discuss how a moderate working capital policy could have been used to address the maturity mismatch.
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