This content was created by Jayson Lowe. This content was uploaded by Jayson Lowe. This is a YouTube video titled "Are Canadian Banks Any Different from Silicon Valley Bank?" created on June 7, 2023, discussing the failure of Silicon Valley Bank and its investment strategies, particularly in treasury bonds, and comparing it to Canadian banking practices.
I think it's important just to dive into identifying that. Silicon Valley bank is the largest bank to fail since the 2008 crisis. And the primary reason was their choice to invest their customers deposits in treasury bonds. So we know as a banking industry, they aside from fractional reserve banking, they are taking customers deposits and lending it out for a higher gain. And they're holding on to reserves, which in Canada is actually they set those reserves and they use that money to government bonds with fixed interest rates. And with the Fed rates increasing that much, the amount of bond yields that they were getting lending it out was so low that nobody now wants it, because the yields that they can get now are at 5%. Like if you bought bonds that are at 1.5% and you're like, hey, let me sell you this bond for 1.5%. So they're going to say, oh, don't worry.
