Nearly 200 Banks in the U.S. May Face Silicon Valley Bank's Fate: WSJ

Silicon Valley Bank went bankrupt after the value of its assets declined amid rising interest rates, prompting customers to withdraw uninsured deposits. According to The Wall Street Journal, at least 186 banks in the U.S. could be at similar risk following the demise of Silicon Valley Bank (SVB), citing a study conducted by economists.

The paper has been published on the Social Science Research Network. The authors analyzed how the Federal Reserve's interest rate hikes affect bank assets and their implications for financial stability. The report notes that the market value of assets in the U.S. banking system is $2.2 trillion lower than their balance sheet value. Bank assets have decreased by an average of 10%, while the most severely impacted 5% of banks have seen a 20% reduction.