AS WE now know, economies around the world responded very differently to the monetary and fiscal stimulus of the lockdown period compared with the those of the Global Financial Crisis. The GFC proved disinflationary whereas lockdown appears to have triggered persistent inflation.
From today’s conditions of surging inflation, rising interest rates and governments struggling to service their debts, the ideas and financial conditions prevalent just before lockdown seem literally incredible.
Silicon Valley Bank’s failure is the largest since Washington Mutual went bust in 2008, a hallmark event that triggered a financial crisis that hobbled the economy for years. The 2008 crash prompted tougher rules in the United States and beyond.
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