News for hackers. Stuff that matters.

A comment on FDIC Establishes Signature Bridge Bank, N.A., As Successor to Signature Bank. Parent comment

Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by oraphalous on Monday March 13, 2023 @12:28AM (#35131074)
Again - wrong. This is not a liquidity crisis. It's a solvency crisis. These banks have debts (i.e. deposits) that exceed their assets (the mbs and bonds that are now worth less than their hold to maturity value).
[ Parent | on HN ]
Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by basch on Monday March 13, 2023 @03:10AM (#35132187)
Why is it a solvency crisis? The 10 year bonds, if held to maturity, cover the assets, no? It’s that they can’t offload the bonds in the current environment because there are more attractive bonds of the same duration.

All of these assets and accounts have to look extremely attractive to the largest institutions that can absorb them without increasing the risk to their own books.

[ Parent | on HN ]
Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by oraphalous on Monday March 13, 2023 @04:44AM (#35132850)
A ten year wait till maturity is not a short term funding shortfal... lol
[ Parent | on HN ]