Their bonds average 1.9% with a 10 year maturity. They pay out when they mature. But because rates are so much higher now, if they sold today they'd take a massive haircut.

The bank made mistakes, and their startup assets are a big ? of unrealized losses. But they do have assets, just not liquid.

But the reason why they'd take a massive haircut if sold today is that when they get the principal back in 10 years it will probably be worth a lot less. Their assets are completely liquid, they're just worth a lot less right now than what they're owed, and for good reason. That the assets might nominally cover the deposits in 10 years is besides the point, the depositors don't want to wait 10 years. Whoever pays to make depositors whole, be it FDIC, tax payers or other banks/bank customers, is transferring real value to the SVB depositors.

> That the assets might nominally cover the deposits in 10 years is besides the point, the depositors don't want to wait 10 years

This would be a problem of liquidity though, which was my original statement.

Not just liquidity. A dollar 10 years from now is worth less than a dollar today. That means it's a solvency issue as well.

Solid except for the time-value of money.

Isn't it what happened with the UK branch of SVB ?