This Global Economics Update answers 5 key questions about the fallout from SVB’s collapse. While the situation remains in flux, there are good reasons to think that it does not call into question the solvency of the US or wider global financial system in the way that Lehman did. But it illustrates the extent to which vulnerabilities are lurking in the financial sector and strengthens the case for central banks to exercise caution in raising rates further as the effects of policy tightening so far become apparent.
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