, Columnist
Silvergate’s Bad Debts Weren’t Its Assets But Its Deposits
Bank runs are normally sparked by fears of loans losses, not because all the liabilities are only there to trade a single market
Silvergate Bank rode a short-lived crypto boom
Photographer: Bloomberg/Bloomberg
This article is for subscribers only.
If Silvergate Capital Corp. fails, it might be the first bank to be brought down by bad liabilities rather than bad assets.
The California-based bank warned in a filing last week that it might not be able to stay in business, which heightened depositors’ rush to move their money elsewhere. Normally, a run on a financial institution is sparked by fears that it has made loans so terrible that the losses would eat into its customers’ savings. It’s a different story at Silvergate.