Here’s how ‘duration risk’ came back to bite Silicon Valley Bank and led to its rapid collapse


A man passes a sign Silicon Valley Banks headquarters in Santa Clara, California, on March 13, 2023.
Noah Berger | Afp | Getty Images

Following the fall of Silicon Valley Bank, a lot of terms are being thrown around on CNBC and elsewhere in discussions about what went wrong. One key term is “duration risk” along the yield curve in the bond market. We don’t usually get into this level of detail on fixed income at the Club — but in this case, it’s important to understanding the second-biggest bank collapse in U.S. history.

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