SVB collapse calls for finance rethink, says Stiglitz

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PARIS, March 15 — In the wake of the collapse of Silicon Valley Bank that has shaken world markets, Nobel economics prize laureate Joseph Stiglitz told AFP that US authorities...

PARIS, March 15 — In the wake of the collapse of Silicon Valley Bank that has shaken world markets, Nobel economics prize laureate Joseph Stiglitz told AFP that US authorities"did the right thing" to protect deposits but said the financial system needs a rethink."That's one of the things that one can't tell. The banks are sounder than they were before, in 2008. There has been progress, not as much as there should be.

And I'm not sure that it has been done. Before the SVB collapse, there had been very little discussion about how technology had changed the probability of bank runs. But now there's a lot of discussion.""The banking system is very complex. There are always rumours about particular banks who have vulnerabilities, and unless you know their balance sheets, their exposures and with the stress tests, you can't really know.

We didn't realise in 2008 the magnitude of the fraud that all the major banks had engaged in. Only after the mass of suits that went on, we saw how bad things were, but we knew that the lending was bad.

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