Bank risk has 2 major components credit risk and interest rate risk (duration risk is a subcomponent). SVB was over indexed on credit risk and under indexed on

Bank risk has 2 major components credit risk and interest rate risk (duration risk is a subcomponent). SVB was over indexed on credit risk and under indexed on interest rate risk (so they could make more profit). This is banking 101 stuff and risk managers (including those at SVB) will point out when this imbalance happens. 2008 was about credit risk, large swaths of bank assets went down because the underlying credit defaulted. 2023 is about interest rates, large swaths of bank assets went down because they were attached to too low interest rates for too long.