I thought this below article no Zerohedge gives an excellent explanation, in layman’s terms, about this problem.
Its also worrying, because many banks will be sitting on huge, unrealized bond losses due to interest rates rising so quickly
If the problem is widespread enough to cause a systemic breakdown, the solution will inevitably be a bailout of some sort. The two largest issues will be how much of a haircut will depositors and shareholders have to suffer. Most likely, shareholders will get hit, but even large depositors will likely be made whole by the FDIC and the Fed.
This is much wider than just Silicon Valley Bank. Look at all the other bank holding company stocks taking a beating today. There are about a dozen. There will be more second-tier banks being taken over by the regulators this weekend and next week.
Spoiler alert. It involves Crypto.
This is why we need honest bank regulation.
Seems we as a people always forget why such fences exist.