Is the Fed’s monetary policy hearting the banks? A columnist for the NYT argues that the sudden and successive rise in the rate of interest is responsible for the failure of Silicon Valley Bank. The spread in the rate of interest was too high for the bank. It was paying high interest rates on the funds it borrowed from the Fed while collecting low interest on its past loans. At the same time, large depositors withdrew their cash from the bank to invest in other financial assets. The combination of the two events created insolvency for the bank. Is this a harbinger of things to come? We shall see.