Wall Street titans warn of a crisis brewing in the global financial sector following the implosion of Silicon Valley Bank.
Why it matters
The warnings from business luminaries including Larry Fink, Ray Dalio, and Carl Icahn come as the collapse of SVB and signs of trouble at Credit Suisse reignite fears of global contagion - even as economies contend with slowing growth and lingering inflation. The collapse of SVB has raised concerns of a crisis in the global financial sector, with warnings from business luminaries including Larry Fink, Ray Dalio, and Carl Icahn. Fink described the situation as the 'price of easy money' that was having to be paid after the Federal Reserve's decision to start aggressively raising interest rates. Fink also predicted that inflation would persist and rates continue to rise, trends that both contributed to SVB's collapse.
What the papers say
The Guardian, NY Post, Reuters
How we got here
The failures of not only SVB but also fellow US lenders Signature and Silvergate have prompted jitters across global markets. The CEO of BlackRock, Larry Fink, raised the possibility that the current upheaval caused by SVB's failure could be the start of a 'slow-rolling crisis' similar to what transpired during the savings and loan crisis of the 1980s and early 1990s. Fink added that markets are currently paying the prices for 'years of easy money' following the Federal Reserve's series of sharp interest rate hikes over the last years. Fink also predicted that inflation would persist and rates continue to rise, trends that both contributed to SVB's collapse.
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Laurence Douglas Fink is an American billionaire businessman. He is the chairman and CEO of BlackRock, an American multinational investment management corporation.
Silicon Valley Bank, a subsidiary of SVB Financial Group, is a U.S.-based high-tech commercial bank. The bank has helped fund more than 30,000 start-ups.
BlackRock, Inc. is an American global investment management corporation based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with $7.4 trillio