A crisis is long overdue. Silicon Valley Bank's collapse won't be a one-off

It has been a year since the Federal Reserve started to raise interest rates and banks are starting to fall over in the US.

- Larry Elliott

Anybody who thinks Silicon Valley Bank was a one-off is deluding themselves. Financial crises have occurred on average once a decade over the past half century so the one unfolding is, if anything, overdue.

The reckoning has been delayed because, since 2008, banks have been operating in a world of ultra-low interest rates and periodic injections of electronic cash from central banks. Originally a temporary expedient after the collapse of Lehman Brothers, cheap and plentiful money became a constant prop for the markets.

Over the years, there was debate about what would happen were central banks to raise interest rates and to suck the money they had created out of the financial system. Now we know.

The action deemed necessary to rein in inflation has deflated housing bubbles, sent share prices plunging and left banks nursing big losses on their holdings of government bonds.

The Bank of England was quicker out of the blocks than the Fed.