Why SVB bank failed ? How our banking system works? Prevent crisis ?

How Modern Banking System works?
How the Bank can fail? what is Dominos effect?
let us learn with Use case of silicon Bank collapse and 2008 Financial Crisis



Bank runs on the trust that out deposits are safe
But is the money really safe?


Do you know the modern banking system runs on Loan to Deposit ratio ?
That is : Bank can only Keep 10-20% of amount received and give remaining amount as loan.

10,000 dollar has become 100,000 in the system . 10 TIMES



stock prices were reduced by 20% and there was loss of 10 trillion U.S. dollars during 2008.

The same thing happened in 2023 with SIlicon valley bank
Start ups could not raise funds , SVB could not generate cashflow, leading to customer started withdrawing money at the same time


The global financial market lost around 465billions u.s. dollars in just 4 days.

The difference this time is that US government has interfered to prevent this dominos effect.

Is the money deposited in BANK is really SAFE?

Please share your comments..