The collapse of Silicon Valley Bank's (SVB) loan portfolio in 2020 is a cautionary tale of concentration risk and lending to the rich. SVB, which is known for its focus on lending to startup companies in the technology sector, suffered significant losses as a result of the COVID-19 pandemic and the economic downturn that followed.

SVB's loan portfolio was heavily concentrated in a few key sectors, including technology and life sciences. This concentration increased the bank's vulnerability to market fluctuations and other external factors, and contributed to the significant losses that it suffered in 2020.

In addition to concentration risk, the article highlights the challenges associated with lending to high-net-worth individuals and businesses. These borrowers often have complex financial situations and may be more vulnerable to economic downturns or other external factors.

(by Megan Podgorski)