Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 55 , 01 December 2023
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Interpreting the Post-Epidemic Banking Sector from a Game Theory Perspective — Using Silicon Valley Bank as an Example
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Abstract
Overview of the trend in the banking industry after the epidemic, regarding the rise of digital banking (neobanking) and customers’ investment behavior — a low-risk portfolio is what most people prefer. The trend of moving business from bank branches to online is a remarkable evolution during COVID-19 and is likely to be the future operation mode of the banking industry. From the general view of the banking industry to the specific bank, a case study of Silicon Valley Bank (SVB) is employed to explain the relationship between game theory and bank run. This paper focuses on identifying the failure of SVB through the discussion of economic aspects such as fund rate hikes and applying game theory and higher-order beliefs to SVB’s case. It finds out that the unique equilibrium for players is a bank run, which needs sound policy and tangible action from authorities to reduce its negative impact on customers and other financial institutions. SVB’s bankruptcy does not trigger another major financial crisis, but the severity of the bank run still needs to be taken seriously.
Keywords
game theory, bank failure, Silicon Valley Bank
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-157-5
- ISBN (Online)
- 978-1-83558-158-2
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/55/20230812
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited