The latest series of bank failures is testing trust in banks and fracturing the illusion that customers’ deposits are sitting there waiting for them. For even the savviest of bank customers, it is easy to make a deposit and forget it. Startups, VCs, and even individuals kept millions of dollars in their Silicon Valley Bank accounts, not thinking twice about the risks being taken with that money on their behalf.
I learned the secrets of the industry firsthand in 2008 as a Wall Street quant trader, who joined Goldman Sachs as a mathematician a few months before Lehman Brothers unraveled. I am sharing those secrets so bank customers can ask better questions and make better decisions about where to store their money.
