The SVB Collapse—Crisis, Context and Containment

Jim Lowell

Partner and Board Member

The Silicon Valley Bank (SVB) collapse initially gave me that spine-tingling feeling of seeing a shark fin off the beach where I swim in Martha’s Vineyard.

Statistically, though, a major bank collapse happens a lot less frequently than a shark attack. Over the last five years, there have been nine bank failures, compared to 57 unprovoked shark attacks in 2022 alone.

After the shock and minor market panic, the Fed lifeguards rushed in and made us feel like it’s safe to go back in the water. Acting with alacrity, they revived confidence with swift action that secured depositors (not shareholders)—meaning that for all practical (banking and payroll) purposes, the banking mini-crisis was over almost before it began.

Like me, your wealth advisor has been here before. Personally, I’ve lived through four major banking crises in my post-college career. Each time, the financial world was upended. Each time, remedies were proposed, lessons were learned, response times improved, and solutions were quicker on the draw.

That could be part of why I didn’t feel panicked by SVB so much as disappointed in our regulators. But even more, I was calmed by the knowledge that our firm has never been in better shape to help clients like you and me navigate through economic and market difficulties with a tailored plan that takes the best and worst of times into account.

With so many pundits giving their alarmist, post-facto SVB predictions, I found Chief Investment Officer Tim Clift’s message reassuring. He cuts to the core of what matters most to me, and possibly to you: Expert guidance and perspective from a trusted partner in a market moment when trust is in short supply.

Of course, crises are never in short supply. And this latest banking emergency, like all the others, may seem to have appeared out of nowhere. But on cursory inspection, it developed due to exactly the kind of lending models and behaviors that bull markets mask with largesse and bear markets expose as unwise.

So, while I know it’s unwise to make a major change to my financial plan based on day-to-day headlines, what is wise? Keeping in touch with your dedicated, disciplined wealth management team at Adviser. Thanks to them, I invest with far greater confidence and with a reasonable hope that the next fin I see will turn out to be a dolphin’s.