Nobel Economist Paul Krugman Analyzes SVB's Collapse and Warns of Future Risks.

Douglas Diamond, the Nobel Prize-winning economist who specializes in bank runs, breaks down the collapse of Silicon Valley Bank (SVB) and identifies its risky policies on both the assets and liabilities sides of its balance sheet as the main cause. SVB's failure to diversify its deposit base and match its investments' maturities to its depositors' demands increased the risk of a run. While the Fed's policy of raising rates hurt, it wasn't the main reason for the implosion. Diamond warns that the Fed's super-tough policies put banks in a difficult position and calls for more sound management practices and regulation to make banks safe.