For markets Silicon Valley Bank’s demise signals a painful new phase

To quell inflation, goes the adage, central bankers must tighten monetary policy until something breaks. For much of the past year this cliché has been easy to dismiss. Starting in March 2022, America’s Federal Reserve has raised rates at the fastest clip since the 1980s. Even as markets plunged, the world’s financial system stayed wreckage-free. When British pension funds wobbled in September, the Bank of England swiftly helped right them. The most notable collapse—that of ftx, a disgraced former crypto exchange—was well outside the mainstream and, regulators say, caused by fraud rather than the Fed.