SVB used an exemption from Basel III, which allowed it to run a riskier business, and eventually led to its implosion.
Basel III was introduced to force banks to be more conservative, and thus more safe. Downside: this also means bank is going to be less profitable.
European banks were forced to implement Basel III, while the US bankers managed to lobby a loophole for certain types of banks. And sure enough, SVB leveraged this loophole.
For those interested, FT Alphaville describes this in ample detail:
Basel III was introduced to force banks to be more conservative, and thus more safe. Downside: this also means bank is going to be less profitable.
European banks were forced to implement Basel III, while the US bankers managed to lobby a loophole for certain types of banks. And sure enough, SVB leveraged this loophole.
For those interested, FT Alphaville describes this in ample detail:
Silicon Valley Bank is a very American mess https://on.ft.com/3ywMURD