Banking and Financial Ins.tu.ons 1 3r term

Apuntes

Banking and Financial Ins.tu.ons – 3r term 1 LECTURE 1: INTRODUCTION Silicon Valley Bank (SVB) failed on March 10, 2023 Silicon Valley Bank was the bank of tech companies/start - ups in the US . The tech - boom of 2021 • Technology companies issued lots of capital in 2021 • What were they doing with the procedes? Sillicon Valley a lot of bonds - > bankrupt If interest rate goes up the Price of a bond goes down P = FV / (1 + r)^t Balance sheet of a bank Financial assets: Bonds Financial liabilities: Deposits Happens - > Bank run people goes to the bank to bring his money out of the bank There is deposit insurance Technology companies issued lots of capital in 2021 What were they doing with the proceeds? For build a factory, they need progress Bank aticipated that customers Will came to get out the money from the bank. But the bank won’t be abloe top ay the customers. The problema is they do not aticipatied in 2022, because the bank expect taht the interest rate Will increase in 2022 and the bank will be able to get cash (or pay customers). Held to maturity : Banking and Financial Ins.tu.ons – 3r term 2 Assets : Funds Liabilities: Deposits and Equity Available ...