Prompt Title: SVB Chat GPT Response

1. Price impact as measured by CPI:

Impact: 4/5 Likelihood: 3/5

RAC score: 12

The impact of price changes, as measured by the consumer price index (CPI), on the bank's solvency is significant (4/5). However, the likelihood of this risk materializing is moderate (3/5).

2. Interest rate risk:

Impact: 4/5 Likelihood: 4/5

RAC score: 16

The impact of interest rate risk on the bank's solvency is also significant (4/5). In addition, the likelihood of this risk occurring is relatively high (4/5), given the bank's heavy reliance on net interest income for its earnings.

3. Economic recession:

Impact: 5/5 Likelihood: 3/5

RAC score: 15

The impact of an economic recession on the bank's solvency is severe (5/5). However, the likelihood of this risk occurring is moderate (3/5).

4. Price changes in the housing market:

Impact: 3/5 Likelihood: 2/5

RAC score: 6

The impact of price changes in the housing market on the bank's solvency is moderate (3/5), but the likelihood of this risk materializing is low (2/5).

5. Pandemic, war, and natural disasters:

Impact: 4/5 Likelihood: 2/5

RAC score: 8

The impact of pandemic, war, and natural disasters on the bank's solvency is significant (4/5). However, the likelihood of this risk occurring is relatively low (2/5).

6. A run on the bank:

Impact: 5/5 Likelihood: 1/5

RAC score: 5

The impact of a run on the bank on the bank's solvency is severe (5/5). However, the likelihood of this risk materializing is very low (1/5), given that the bank is FDIC-insured and has a strong reputation.

Based on the RAC scores, the risk with the highest potential impact on the bank's solvency is the interest rate risk, with a score of 16. This risk is both highly impactful and likely to occur, given the bank's reliance on net interest income for its earnings and the prolonged period of low interest rates in the economy.