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

Re:FDIC Takes over Silicon Valley Bank by semi_cityplan on Saturday March 11, 2023 @09:30AM (#35108522)
Deposits aren’t free. We will use round numbers. If I take $100B in deposits and pay .5% interest, that’s an expense of $500M per year and including overhead even when rates were 0, deposits at a bank cost more than 0.5%.

So I need to lend it out so I can make the spread and I’m not just bleeding it money

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Re:FDIC Takes over Silicon Valley Bank by kayamon on Saturday March 11, 2023 @08:10PM (#35115098)
Deposits don't need to have interest paid. It's entirely possible for the money to simply sit there and not be invested in anything.
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Re:FDIC Takes over Silicon Valley Bank by semi_cityplan on Saturday March 11, 2023 @09:29PM (#35115772)
Four questions - where does a bank store cash? What is the IORB and what are its underlying assumptions? What is the overhead cost in banking? What is the cost of ACH and a wire? I don’t contend you can just have money sit there. I also don’t contend that it was stupid in hindsight to be this levered to duration. But there is an overhead cost in banking.
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