Re:Emergency credit line for SVB customers
by fnordpiglet on Saturday March 11, 2023 @04:16PM
(#35112787)
That untrue. If they held the bonds to maturity they would be worth more than their face value. However due to time value of money other bonds with higher yields are in more demand making the current price lower. A private entity wouldn’t take the risk but a public one would. In fact the fed (quasi public) has been buying precisely these assets for over a decade. They actually made substantial returns by simply holding these MBS to maturity.
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Re:Emergency credit line for SVB customers
by JumpCrisscross on Sunday March 12, 2023 @08:05AM
(#35119129)
> the fed (quasi public) has been buying precisely these assets for over a decade
At market price, not face value.
Re:Emergency credit line for SVB customers
by fnordpiglet on Monday March 13, 2023 @04:52AM
(#35132914)
That’s correct, but they can also lend at net present value of the HTM value using it as collateral.