Re:SVB shows that there are few libertarians in a financial ...
by jmyeet on Monday March 13, 2023 @05:35PM
(#35143137)
> it is clear that the root cause of the problems is the actions of the government and the FED.
No it's not.
SVB bought 10 year MBS a couple of years ago to hold capital. They could've instead just rolled 90 day Fed debt and thus have been largely immune to interest rate changes. What they did was they took a risk with custodial assets. This is 100% the bank's fault.
Why did they do that? Because 10 year MBS had a higher yield than 90 day debt. So they took a risk. Why? For the benefit of executives and shareholders.
SVB did this to themselves, possibly with Thiel instigating a bank run for whatever reason.
No it's not.
SVB bought 10 year MBS a couple of years ago to hold capital. They could've instead just rolled 90 day Fed debt and thus have been largely immune to interest rate changes. What they did was they took a risk with custodial assets. This is 100% the bank's fault.
Why did they do that? Because 10 year MBS had a higher yield than 90 day debt. So they took a risk. Why? For the benefit of executives and shareholders.
SVB did this to themselves, possibly with Thiel instigating a bank run for whatever reason.