Are You Sure Your Bank is Safe?
From 50 | Plano via 50Plano | Published March 13, 2023, 4:53 p.m. by The Affluent Team
If you haven’t heard of these 3 bank collapses over the past few days, then you may want to read this article to know how you can make sure your bank accounts are ok:
Silicon Valley Bank
Signature Bank
Silvergate Bank
Notice they all start with the letter ‘S’. Of the 3 bank failures, Silicon Valley Bank gained the most attention. The reason for its failure is quite complex because it involves the loss in value of its bond portfolio. So I asked ChatGPT to explain the relationship between the Federal Reserve raising interest rates so quickly over the past 10 months, and the loss of bond portfolio valuation. Here’s the reply:
Higher interest rates can cause losses in a bond portfolio for a few reasons. First, when interest rates rise, the value of existing bonds with lower interest rates decreases, because investors can buy new bonds with higher interest…
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