A Tale of Two Banking Crises

The 21st century has seen more than its share of bank crises. In this presentation, Rebel Cole, Ph.D. will explore the origins and repercussions of two of the most consequential banking crises affecting the U.S.: the global financial crisis that began with the failure of Lehman Brothers investment bank in 2008 and persisted for several years; and the more recent banking crisis that started with the sudden failure of Silicon Valley Bank on Mar. 10, 2023, and is ongoing. First, Cole will examine how a bubble in the housing market spread to the financial markets as housing prices collapsed during 2007-2008, primarily the role of structured financial products, including collateralized debt obligations (CDOs) and credit default swaps (CDSs). He will then explain how monetary and fiscal policies during and after the COVID-19 pandemic led to the failure of Silicon Valley Bank and Signature Bank of New York and threatened the viability of hundreds of other banks, including the role of “interest-rate risk.” A Q&A session will follow this valuable program. This event is also available virtually.