News for hackers. Stuff that matters.

A comment on Big Banks Agree to Historic $30B Deposit Injection in First Republic. Parent comment

Re:Big Banks Agree to Historic $30B Deposit Injection in Fir... by uCano1 on Friday March 17, 2023 @08:16AM (#35196050)
> It seems to me that there is a considerable amount of risk to the participating banks if FRB fails. "Hold the line" is right - if more banks fail, these participating banks will lose a lot more than their $1B each.

$5 billion each.

[ Parent | on HN ]
Re:Big Banks Agree to Historic $30B Deposit Injection in Fir... by lxgr on Friday March 17, 2023 @08:19AM (#35196079)
A 100% haircut would mean that their assets are effectively worthless. I highly doubt that the depositing banks would have done this if that were the case.
[ Parent | on HN ]
Re:Big Banks Agree to Historic $30B Deposit Injection in Fir... by bumby on Friday March 17, 2023 @09:11AM (#35196623)
Even if their assets are things like Treasury notes? I'm assuming JPM would get first dibs on those types of assets if First Republic went under, no?
[ Parent | on HN ]
Re:Big Banks Agree to Historic $30B Deposit Injection in Fir... by lxgr on Friday March 17, 2023 @10:13AM (#35197358)
Yes, that‘s my point: Even in case of an unprecedented interest rate hike and 10-year treasuries, the haircut due to depreciating asset values would not be 100% but much less.
[ Parent | on HN ]
Re:Big Banks Agree to Historic $30B Deposit Injection in Fir... by bumby on Friday March 17, 2023 @10:16AM (#35197392)
Sorry, I misinterpreted your first post but thank you for clarifying.
[ Parent | on HN ]
Re:Big Banks Agree to Historic $30B Deposit Injection in Fir... by pjc50 on Friday March 17, 2023 @08:18AM (#35196066)
Up to $5bn. The actual likely value at risk is a lot smaller; would need a First Direct balance sheet to estimate it.

(Some are subscribed at $1bn and some at $5bn. That must have been an interesting meeting.)

[ Parent | on HN ]