The world economy continues to feel the ripple effects after U.S. authorities took over Silicon Valley Bank (SVB) last Friday.
SVB was the 16th largest bank in the United States, largely catering to startups and the tech industry in California. It was the largest U.S. bank failure since 2008. On Sunday, regulators also closed New York-based Signature Bank.
But in Canada, a bank hasn’t collapsed in nearly 27 years. While the risk of bank failure in Canada isn’t zero, many of the circumstances that led to the collapse of SVB don’t apply in the Canadian banking sector.
“No bank is immune to a bank run,” Western University’s Cristián Bravo, who is the Canada Research Chair in banking and insurance analytics, said over the phone Tuesday. “If everyone goes to the bank and tries to withdraw their money, that is going to cause a collapse.”