Silicon Valley Bank, one of the leading lenders to the tech sector, was shut down

by regulators on March $10,2023$ over concerns about its solvency.

Founded in $1983,$ the bank grew to become the $16$th$-$largest in the U$.$S$.$ with $$210$

billion in assets. Over the years, its client list grew to include some of the biggest

names in consumer tech like Airbnb, Cisco, Fitbit, Pinterest and Square.

The increased risk at Silicon Valley Bank can be attributed to two main factors.

First, the poor performance of the IT sector, the clients of the Bank, in the early

$2023.$ Some startup clients pulled out their deposits. Second, the bank signaled

that its securities had lost value, since FRB $($the central bank of the U$.$S$.)$

increased its short$-$term interest rate. Silicon Valley Bank held long$-$term

government bond as their asset.

Discuss how the central bank$$s monetary policy can affect Silicon Valley Bank$$s

default risk.