Silicon Valley Bank Collapse May Calm Interest Rate Rises

The collapse of Silicon Valley Bank could fuel pressure on central banks to ease up on interest-rate hikes, according to some finance experts.

- Vicky Shaw

Alice Haine, a personal finance analyst at Bestinvest, said: "The collapse of two US banks in recent days, Silicon Valley Bank and Signature Bank, is a reminder of the risks that come when central banks, like the US Federal Reserve, raise interest rates aggressively. The issue at the heart of SVB's failure is massive losses on its bond investments in the face of rising US interest rates, and a fire sale of these as its clients - typically technology start-up entrepreneurs - began pulling money out."