How could Silicon Valley Bank and other lenders have been so blind to interest-rate risk? Habits formed over many years of low rates may have had a lot to do with it.
As it accumulated billions worth of fixed-rate Treasurys and mortgage bonds in recent years, SVB failed to anticipate the speed at which the Federal Reserve would move with interest-rate hikes last year. But the bank’s rapid rise this century took place mostly in an era of very low interest rates and freely flowing money.
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Source:" WSJ "
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