Lessons from SVB and the importance of diversification and price discovery

Global uncertainties highlights the importance of diversification and price discovery and this is exactly the same for banking

Every few years an event occurs that throws our normality out of kilter. 

Being human, we have an incredible ability to adapt and move on. That often happens in the financial markets, whether it's a 2008 crisis, Covid or even an SVB crisis.

What would happen if we did not learn from each crisis? Doomed to a Groundhog Day.

So, in as few words as possible. If we learn and take away anything, it is this.

Cash is king and needs to be managed and optimized. Cash provides an ability to react to events without having to liquidate assets. The percentage of cash held depends on individual business requirements, but should be guided by dynamic policy guidelines.

1-Diversification: It is essential that all organizations (and people) obsessively look at diversification of risks. NEVER have all eggs in a single basket.

2-Direct Bank relationships-In exactly the same breadth as above, it is essential to attempt to have a number (2-3) of very good banking relationships in place. One never knows when it will be needed.

3-Brokers-No need to use a broker or adviser to effect cash investments. Brokerage rates would be around .55%. This is unnecessary and reduces your net yield.

Taken together, this reinforces our view on the importance of  the importance of diversification and price discovery

Additional factors that should be considered for cash management include:

1. Multi-bank interest rate comparison for white-label?

2. How to Compare the best corporate savings rates?

3. multi-bank interest rate comparison for trustees?

4. How to Compare rates certificate of deposit?

5. How to uncover multi-bank interest rate comparison?

6. compare rates on treasury management marketplace?

7. How to provide multi-bank interest rate comparison?

8. How to simplify multi-bank interest rate comparison?

9. How to manage multi-bank interest rate comparison?

10. How to Report multi-bank interest rate comparison?

11. How to Implement multi-bank interest rate comparison?

12. multi-bank interest rate comparison for white-label?