Duration Mismatch: Triggering the Sudden Collapse of Regional Banks

In the spring of 2023, ostensibly healthy financial institutions vanished overnight, triggering widespread panic. The culprit was not the toxic subprime mortgage debt of previous eras, but rather the safest, most conservative asset class on earth: long-term government bonds. When regional banks absorbed massive influxes of customer deposits, they responsibly parked this cash in ten-year treasury...