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https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFPI-Orders-Silicon-Valley-Bank-03102023.pdf https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/D

by tekla 4y ago

https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFPI-Orders-Silicon-Valley-Bank-03102023.pdf https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFP... California has declared it insolvent. It literally by definition is now.

fnordpiglet 4y ago
No, it’s not. SBV was unable to meet its obligations and was insolvent. Then the FDIC stepped in and a part of its function will be to ensure liquidity. So it’s is therefore not insolvent. The FDIC won’t take a loss so it may become insolvent again and might have to resort to insurance to make depositors partially whole. The fact that it has a) access to sufficient credit liquidity via governmental ownership b) assets to collateralize that credit means it isn’t insolvent any more. If they had secured emergency credit lines it would be still a private institution, but functionally that’s irrelevant if you have assets of functional business relationship with SVB. Beyond an operational delay as they reopen business next week it’s functionally a no-op. This stuff isn’t cut and dry, and it’s all complex, but I think the practical outcome of this is a big nothing burger for anyone but the principals of SVB.
- petesergeant 4y ago
  > No, it’s not [insolvent] from the article op linked, in "Findings of Fact", by the Commissioner of Financial Protection and Innovation: > the bank is now insolvent
- shawabawa3 4y ago
  > SBV was unable to meet its obligations and was insolvent. Then the FDIC stepped in and a part of its function will be to ensure liquidity. So it’s is therefore not insolvent. The FDIC won’t take a loss so it may become insolvent again This is nonsense and contradictory The bank was insolvent. FDIC took over (due to insolvency) and has no obligation to make the bank solvent again (other than the 250k insurance limit)
  - fnordpiglet 4y ago
    Ok, so given the recent announcements by the fed, treasury, and fdic i would just point out everything I said was right.

by tekla 4y ago

fnordpiglet 4y ago

No, it’s not. SBV was unable to meet its obligations and was insolvent. Then the FDIC stepped in and a part of its function will be to ensure liquidity. So it’s is therefore not insolvent. The FDIC won’t take a loss so it may become insolvent again and might have to resort to insurance to make depositors partially whole. The fact that it has a) access to sufficient credit liquidity via governmental ownership b) assets to collateralize that credit means it isn’t insolvent any more. If they had secured emergency credit lines it would be still a private institution, but functionally that’s irrelevant if you have assets of functional business relationship with SVB. Beyond an operational delay as they reopen business next week it’s functionally a no-op. This stuff isn’t cut and dry, and it’s all complex, but I think the practical outcome of this is a big nothing burger for anyone but the principals of SVB.

petesergeant 4y ago
> No, it’s not [insolvent] from the article op linked, in "Findings of Fact", by the Commissioner of Financial Protection and Innovation: > the bank is now insolvent
shawabawa3 4y ago
> SBV was unable to meet its obligations and was insolvent. Then the FDIC stepped in and a part of its function will be to ensure liquidity. So it’s is therefore not insolvent. The FDIC won’t take a loss so it may become insolvent again This is nonsense and contradictory The bank was insolvent. FDIC took over (due to insolvency) and has no obligation to make the bank solvent again (other than the 250k insurance limit)
- fnordpiglet 4y ago
  Ok, so given the recent announcements by the fed, treasury, and fdic i would just point out everything I said was right.