Advertisement
LettersSilicon Valley Bank collapse shows the need to learn from past mistakes
- Readers discuss the loophole that fuelled SVB’s collapse, the ‘mountain’ of MTR fares, and platform gaps at train stations
3-MIN READ3-MIN
1
Feel strongly about these letters, or any other aspects of the news? Share your views by emailing us your Letter to the Editor at [email protected] or filling in this Google form. Submissions should not exceed 400 words, and must include your full name and address, plus a phone number for verification.
The sudden collapse of Silicon Valley Bank (SVB) has drawn the world’s attention to risk oversight of financial institutions, and the need to enhance financial security and contingency plans. Some people have referred to the 2008 financial crisis, in which the collapse of several financial institutions generated a domino effect across multiple markets and industries and drove the world into recession.
In fact, the 2008 financial crisis serves as a cautionary tale about how important risk management is for financial institutions. Several major banks in the United States made significant investments in mortgage-backed securities when the property market prospered, exposing themselves to credit risk.
We now know subprime mortgages were a volcano waiting to erupt in the event of the housing bubble bursting, which could leave homeowners in a negative financial position. The disaster unfortunately struck, turning the mortgage-backed securities the banks held into worthless rubbish.
Select Voice
Select Speed
1x
AI-generated voice