3 ms·

Does that means panics are necessary at every other bank, seeing as how their liquidity is similar (or worse)?

• JumpCrisscross 4y ago
  > every other bank, seeing as how their liquidity is similar Source? SVB had an unusual amount of long-duration assets. Most banks maintain a buffer of low-yielding, highly-liquid on-the-run Treasuries.
  • nostrebored 4y ago
    I would not find it surprising if bank liquidity was actually historically low, especially considering that many banks do maintain buffers _of the same covaried assets_ and that banks _induce covariance when they choose to use an asset class for liquidity_. Maybe ZFRB was just a really, really bad idea.
  • borski 4y ago
    Not anymore. Very few maintain this, JPM being the notable exception. The only difference is that panic set in and there was a bank run, largely led by VCs telling startups to pull their money.