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What's really the difference between issuing a loan and buying the same loan issued by someone else? SVB bought a load of treasury bonds which is equivalent fr
by kaashif 4y ago
What's really the difference between issuing a loan and buying the same loan issued by someone else?
SVB bought a load of treasury bonds which is equivalent from a risk perspective from issuing a 10 year (or whatever) loan to the government, right?
- scotty79 4y ago> What's really the difference between issuing a loan and buying the same loan issued by someone else? Risk. When you are issuing a loan you, yourself are in control of the risk you have created. When you buy, you can easily buy massive amounts of risk someone else have created and you can easily be overwhelmed even when you try to do industry standard, responsible, "safe" thing.