FINANCE

The Lehman Brothers Mandela Effect

The failure of Silicon Valley Bank highlights our false memory of the last financial crisis

The erroneously monocled Monopoly Man is an example of The Mandela Effect, a phenomenon that causes us to create false memories of past events. Photo Credit

When Silicon Valley Bank failed earlier this month, my first reaction was to compare the venture capital industry’s financial institution of choice to the collapse of Lehman Brothers in 2008. “It’s Lehman all over again,” one of my former trading colleagues said on a phone call later that day.

Of course, SVB wasn’t an investment company like Lehman; it was a regional bank. It wasn’t nearly as large of a business as the bulge-bracket bank, which had 25,000 employees globally. But for some reason, the failure of the country’s 16th-largest bank — its second-largest banking collapse — raised the specter of Lehman Brothers.

Based on the media coverage, placing the lion’s share of the blame for the 2008 crisis on Lehman was much more widespread than I realized.

In the days following SVB’s demise, HDFC Bank chief economist Abheek Barua assured CNBC viewers that SVB wasn’t “a Lehman moment,” implying that the now-defunct investment bank sparked the 2008 financial meltdown.

Around the same time, The New York Post published a piece entitled, “Top Silicon Valley Bank execs worked at notoriously troubled…