The recent collapse of Silicon Valley Bank (SVB) has sent shockwaves throughout the markets, with concerns that other banks may face similar problems. The bank’s failure has led to a massive sell-off in equity markets worldwide, wiping out nearly Rs 10 lakh crore from the pockets of Dalal Street investors and leaving Sensex down about 2,500 points in just four days. However, there are some silver linings in the dark clouds hovering over the US banking system, which market insiders have started to notice. Here are three reasons why:

1. Taming the Fed: The SVB crisis might force the US Federal Reserve to end its rate hike cycle, boosting equity investors as the money flows into equities and better-performing economies like India. A pause by the Fed will also comfort RBI to maintain the status quo in its April meeting.
2. Fall in crude prices: The SVB episode has sparked fears of a financial crisis leading to a drop in crude oil prices, which is seen as a positive for India as it imports most of its oil requirements.
3. Bond yields: US 2-year and 10-year bond yields have decreased from levels before the SVB episode. This could diminish the worries of long-term investors, supported by a change in monetary policy from hawkish to neutral.

The collapse of SVB has raised concerns among investors, but it is essential to understand what happened and what could happen next. The bank failed due to a significant run on deposits that left the medium-sized bank unable to stay afloat. The US authorities have taken control of SVB and unveiled sweeping measures to rescue depositors’ money at the failed bank. HSBC Holdings Plc will acquire the bank’s UK arm.

In addition to SVB, another bank, Signature Bank, was also closed, and the government stepped in to protect all of those banks’ deposits and create a way for other banks to access more cash.

While the situation remains fluid, it is crucial to stay informed and watch the potential impact of these developments. At the same time, some possible silver linings could emerge from this crisis, which could boost investors in the long run.