SVB failure highlights the need to manage interest rate risk carefully

I spoke with FT’s Brooke Masters on the lessons banks must take from SVB’s meltdown.

From the article:

One large investor in bank shares now worries that bank risk models are out of date, saying: “Outflow rates need to change. We are learning that retail deposits are as flighty as anything else.” 

Bill Isaac, who chaired the FDIC during the 1980s savings and loan crisis, says that the lessons from that period are clear and still relevant today. “Don’t lock up [deposits] for long periods because easy come, easy go…”

Read the story here.