KOSPI · March 14, 2023
After a US regional bank failed
-2.56%
single-day change vs previous close
Part of a longer stretch
Seven months betting rates had peaked
midway through · 2023-01-03 → 2023-08-01, +20.21% over the whole period
What happened that day?
- The KOSPI fell 2.56% on the day
- Over the weekend a bank known for lending to US technology firms had closed — the second-largest bank failure in American history
- The cause was unusual. It was not bad loans but the fall in the value of its government bonds as rates rose
- Government bonds held to maturity lose nothing, but if deposits leave all at once you must sell them at a loss
- Withdrawals crowded in within days because the news spread so fast. The episode is remembered as showing that communication speed changed the speed of bank runs
- Share markets in this period rose anyway, on the view that a shaky banking system would stop the central bank raising rates
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.