News for hackers. Stuff that matters.

A comment on FDIC Takes over Silicon Valley Bank. Parent comment

Re:FDIC Takes over Silicon Valley Bank by mbreese on Friday March 10, 2023 @04:49PM (#35101593)
It’s cash, until the bank converts it to something else. For example a loan.

Yes, it is initially cash. But if the bank wants to make any money, it needs to convert that cash into some other vehicle for generating interest.

[ Parent | on HN ]
Re:FDIC Takes over Silicon Valley Bank by rkagerer on Friday March 10, 2023 @06:12PM (#35102611)
One way to generate interest is to simply park it at the Fed. Check out The Narrow Bank for the story of an upstart that wanted to make that their whole business model.

https://johnhcochrane.blogspot.com/2018/09/fed-nixes-narrow-...

[ Parent | on HN ]
Re:FDIC Takes over Silicon Valley Bank by prottog on Friday March 10, 2023 @09:29PM (#35104492)
Thank you for this! Very interesting.
[ Parent | on HN ]