US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits in the largest failure of a US bank since 2008.
The problem seems to be that the US economy appears to be doing rather well - so much so that there have been hawkish remarks from the Federal Reserve Chair on March 7th which indicates that there will likely be a need to raise interest rates more than expected to avoid overheating. And this has been compounded by Friday's faster than expected growth in non-farm payrolls. So further interest rate rises and consequent falls in bond prices seem almost certain.
The collapse came after SVB said it was trying to raise $2.25bn (£1.9bn) to plug a loss caused by the sale of assets, mainly US government bonds, which had been affected by higher interest rates.
So a major US Bank (16th in US size) has had a very large sneeze. How far will the infection spread?
(PS - I was not sure where to post this note - if it is already covered elsewhere - apologies.)
Later addition - its also covered in Company Analysis and Macro and Global Topics