Skip navigation


Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Hot Topic

Recommendation

In March 2023, Silicon Valley Bank succumbed as its depositors fled, with these and other stakeholders signaling the bank’s perceived financial troubles through social media. The momentum was so swift and powerful that bank executives could not forestall the financial implosion. In a thoroughly researched and well-structured analysis, a group of academics explains how Twitter users created a cascading effect that turned into an unprecedented bank run. The professors also show how social media could put other financial institutions at risk. Investors, bankers and policy officials will find this a robust examination of the entanglement of bank failure and social media.

Take-Aways

  • Silicon Valley Bank (SVB) shuttered after depositors withdrew large sums from the institution and the bank was unable to meet its obligations.
  • Investors and depositors on social media generated a torrent of messages that accelerated SVB’s demise.
  • The banking system could be at risk for contagion when social media users speculate about the health of an institution.

About the Authors

J. Anthony Cookson et al. are finance professors at the University of Colorado, Boulder; James Madison University; Universitat Pompeu Fabra and Barcelona School of Economics; Université Paris Dauphine; and Arizona State University.