In one of his famous “memos” released on April 17, Howard Marks (Trades, Portfolio), co-chairman of multibillion-dollar asset management firm Oaktree Capital, discussed the recent bank failures.
The paper, titled “Lessons From Silicon Valley Bank,” began with the reassurance Marks was not going to provide a history of the recent meltdowns of SVB Financial Group’s (SIVBQ, Financial) Silicon Valley Bank and Signature Bank (SBNY, Financial). Rather, he focused on their significance.
He wrote:
“My sense is that the significance of the failure of SVB (and Signature Bank) is less that it portends additional bank failures and more that it may amplify preexisting wariness among investors and lenders, leading to further credit tightening and additional pain across a range of industries and sectors.”
Marks then when on to explain what made SVB “somewhat of a special case,” along with what it had in common with other banks. He also explored whether or not the bank’s collapse was inevitable and compared it to the great financial crisis.
Read Marks’ full memo here.
