Professors from five different universities have released a study confirming that social media contributed to the run on Silicon Valley Bank, and they say other banks have similar risks. The researchers dissected roughly 5.4m tweets from the start of the year through March 14 about publicly traded banking stocks, finding that the risk of a bank run “increases markedly” when firms are repeatedly mentioned during “periods of intense Twitter conversation.”
| less than a minute read
Twitter poses a risk to the financial system and helped fuel the SVB run, says first major study to investigate the topic
In 1982, after Oklahoma’s Penn Square Bank failed, Republican Rep. Ed Weber of Ohio scolded regulators during a hearing, calling the collapse “an indictment of the regulatory system.” But officials at the Comptroller of the Currency, which was responsible for auditing Penn Square, fired back, blaming fellow regulators and the bank’s management for relying on high-risk energy loans.
