How “duration risk” returned to SVB and led to a rapid decline


A man walks past a sign for a bank headquarters in Silicon Valley on March 13, 2023 in Santa Clara, California.

Noah Berger | AFP | Getty Images

In the wake of the Silicon Valley bank collapse, many terms have been bandied about on CNBC and elsewhere in debates about what went wrong. The key term is “duration risk” along the yield curve in the bond market. We don’t normally go into this level of fixed income at the Club – but in this case it’s important to understand the second largest banking collapse in US history.

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