Bank lending & credit risk, part 1

This lecture delves into the intricacies of bank lending and credit risk, focusing on the recent failure of Silicon Valley Bank and its repercussions on the global financial landscape. The discussion covers the balance sheet growth of SVB, the impact of interest rate fluctuations on its securities portfolio, and the dynamics of the recent bank run. It also explores the role of collateral and capital in credit analysis, the importance of loan terms in screening borrowers, and the implications of state loan guarantees on credit supply. Through case studies and empirical evidence, the lecture provides insights into the challenges and strategies in managing credit risk in the banking sector.