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Genuine question: If a bank invests all customer deposits in 10y treasury bonds, and then interest rates rise, is it solvent? It seems this is essentially what
by verteu 4y ago
Genuine question: If a bank invests all customer deposits in 10y treasury bonds, and then interest rates rise, is it solvent? It seems this is essentially what made SVB insolvent.
- loopdoend 4y agoThey are solvent unless they have to suddenly sell the bonds, in which case they are worth less now than at maturity.