duration risk Archives - Marketplace

Silicon Valley Bank Collapse

What is "duration risk"? (And how did it get Silicon Valley Bank into trouble?)

by Lily Jamali

Mar 16, 2023

Investing in long-term government bonds and mortgage-backed securities hurt the bank as interest rates rose and bond prices plummeted.

Some bonds are more sensitive to interest rates than others, depending on how long they take to mature. That “duration risk” hurt SVB financially.

Noah Berger/AFP via Getty Images

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