Macro N Cheese

When you learned of the run on Silicon Valley Bank, did the image of George Bailey come to mind, facing the mob demanding full withdrawals from Bailey Building & Loan?“You’re thinking of this place all wrong, as if I had the money back in the safe. The money’s not here. Why, your money’s in Joe’s house that’s right next to yours. And the Kennedy house and Mrs. Maitland’s house, and a hundred others. You’re lending them the money to build, and they pay it back to you as best they can. What are you gonna do, foreclose on them?” (It’s a Wonderful Life, 1946)Steve’s guest is Brian Romanchuk of Bond Economics, here to break down the conditions and events leading to the collapse of SVB. Spoiler alert: there’s no Jimmy Stewart, no uplifting message, no sentimental tears.Brian explains how the American banking system is unusual relative to other developed countries. In Canada, where he lives, the Big Five banks are an oligopoly, but they’re diversified. They deal with all the nation’s banking needs.SVB is a relat