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NYU Stern SVB and Beyond

SVB and Beyond: The Banking Stress of 2023

In the aftermath of the failures of Silicon Valley Bank (SVB), Signature Bank, First Republic Bank, and of the depositor runs on other midsized banks, 10 leading accounting, economics, and finance scholars from NYU Stern and external collaborators develop an organized framework for analyzing this episode and diagnosing the frailties that led to it. They also make recommendations to strengthen the banking system and to safeguard financial stability going forward. 

A complimentary download of the book is available here

Read the Press Release

The book’s four editors are NYU Stern Professors Viral V. Acharya, Matthew P. Richardson, Kermit L. Schoenholtz, and Bruce Tuckman. The authors are NYU Stern Professors Viral V. Acharya, Richard Berner, Thomas Philippon, Matthew P. Richardson, Stephen G. Ryan, Alexi Savov, Philipp Schnabl, Kermit L. Schoenholtz, Bruce Tuckman, Lawrence J. White, and co-authors Stephen G. Cecchetti (Brandeis University), Sehwa Kim (Columbia University), and Seil Kim (Baruch College). 

SVB and Beyond: The Banking Stress of 2023 adds to Stern’s roster of published works on financial crises and financial regulation, including: Regulating Wall Street: CHOICE Act vs. Dodd-Frank; Restoring Financial Stability: How to Repair a Failed System; Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance; Guaranteed to Fail; and Modernizing Insurance Regulation.  

News Coverage
Financial Times: Insights from NYU Stern's new book, "SVB and Beyond: The Banking Stress of 2023," co-authored by Viral V. Acharya, Richard Berner, Thomas Philippon, Matthew P. Richardson, Stephen G. Ryan, Alexi Savov, Philipp Schnabl, Kermit L. Schoenholtz, Bruce Tuckman and Lawrence J. White are featured: "When U.S. Safety Nets Undercut the Financial System." 
Read more.

Endorsements 
“This collection of essays by some of the leading experts in the field masterfully covers all the bases with respect to current challenges facing the banking system. It provides a thoughtful treatment of the economics of banking, the missteps by management and regulators that led to SVB’s failure, the implications for the industry going forward, and the difficult tradeoffs facing policymakers. It will be enormously valuable for anyone in the public or private sector with an interest in the industry.” 
- Jeremy Stein, Moise Y. Safra Professor of Economics, Harvard University, and former member of the Board of Governors of the Federal Reserve System.

“This volume is a must read for anyone who wants to understand the regional bank turmoil of 2023. In this compilation of essays, leading scholars lucidly explain just what went wrong, why the problems are not yet behind us, how policy makers can enhance the resilience of the banking system, and the dangers that lurk should policy makers learn the wrong lessons from this episode."
- Kathryn Judge, Harvey J. Goldschmid Professor of Law Vice Dean for Intellectual Life, Columbia Law School

“This new book by leading academicians continues the Stern tradition of analyzing the frailties of our financial system and proposing remedies to promote financial resilience. It will be of great use to scholars, market practitioners and policymakers alike."
- Dr. Henry Kaufman, President of Henry Kaufman & Company, Inc.

Table of Contents

  • Prelude - Viral V. Acharya, Matthew P. Richardson, Kermit L. Schoenholtz, and Bruce Tuckman

  • Summary of Contents - Viral V. Acharya

PART I: The Banking Stress of 2023

  • Chapter 1: Overview of Recent Banking Stress - Viral V. Acharya, Stephen G. Cecchetti and Kermit L. Schoenholtz

  • Chapter 2: Underlying Macroeconomic Causes of Recent Banking
    Stress     - Viral V. Acharya, Stephen G. Cecchetti, Kermit L. Schoenholtz, and Lawrence J. White

  • Chapter 3: Banks, Interest Rate Risk and Systemic Risk -- Theoretical and Historical Perspectives - Matthew P. Richardson, Alexi Savov and Philipp Schnabl

  • Chapter 4: Silicon Valley Bank: Failures in "Detective" and "Punitive" Supervision Far Outweighed the 2019 Tailoring of Preventive Supervision - Bruce Tuckman

  • Chapter 5: Evaluation of the Policy Response: On the Resolution of Silicon Valley Bank, Signature Bank, and First Republic Bank - Richard Berner, Kermit L. Schoenholtz, and Lawrence J. White

PART II: Proposals for Reform

  • Chapter 6: Restoring Confidence in the Banking System with a Stagflation Stress Test - Viral V. Acharya
  • Chapter 7: Expanding Mark-to-Market Accounting for Banks’ Debt Investment Securities and Regulatory Capital - Sehwa Kim, Seil Kim, and Stephen G. Ryan
  • Chapter 8: Revisiting the Design of Deposit Insurance - Stephen G. Cecchetti, Thomas Philippon, Kermit L. Schoenholtz, and Lawrence J. White
  • Chapter 9: The FHLB Role in the SVB and Related Debacles - Stephen G. Cecchetti, Kermit L. Schoenholtz, and Lawrence J. White
  • Chapter 10: Strengthening Supervisory and Resolution Frameworks - Richard Berner
  • Appendix: Liquidity Risk in Nonbank Financial Institutions and in Systemically Important Markets - Richard Berner