Comparative Analysis of the 2008-2009 Financial Crisis and the Current Banking Crisis

Lessons learned from Silicon Valley Bank, Credit Suisse, Deutsche Bank, and other Major Players

Abstract

In the aftermath of a series of banking failures, we examine the unraveling of Silicon Valley Bank (SVB), Credit Suisse, and Deutsche Bank, among other players, delving into the causes, consequences, and lessons learned. These crises were fueled by factors including systemic risk, poor risk management, scandals and exposure to volatile sectors. The interplay of interest rates and risk management proved pivotal, exposing SVB's inability to adapt. As Credit Suisse grappled with long-standing management issues, its AT1 bonds were obliterated after its rescue merger with UBS, while Signature Bank's reliance on uninsured deposits and risky ventures led to a massive deposit withdrawal, and Deutsche Bank's multibillion-euro tax evasion among other scandals translated into poor performance. Similarly, First Republic's collapse marked the largest bank failure since the 2008 crisis, prompting JP Morgan's emergency acquisition. These incidents underscore the need for new management policies and preparedness in safeguarding financial institutions.