Journal Article

Failure of Silicon Valley Bank Reduced Local Consumer Spending but Had Limited Effect on Aggregate Spending

Abstract: The failure of Silicon Valley Bank (SVB) on March 10, 2023, raised concerns that deteriorating financial market conditions would reduce consumer spending. We use high-frequency data from California to examine whether the March banking stress influenced trends in consumer spending in counties more affected or less affected by the failure of SVB. We find that while spending declined in some counties heavily exposed to the SVB failure, aggregate consumer spending was not significantly affected.

Keywords: consumer spending; bank failures; macroeconomics;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2023-09-06

Pages: 4