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SVB was only able to borrow $15B from their FHLB debt facility, before they got cut off. The FHLB total capacity is ~$60 billion. Is First Republic stating actu
by dannyw 4y ago
SVB was only able to borrow $15B from their FHLB debt facility, before they got cut off. The FHLB total capacity is ~$60 billion. Is First Republic stating actual numbers they are guaranteed to have access to?
Their shareholders are already panic selling (FRC down 36%), their bonds appear to be sinking, and few private parties wants to throw good money after bad. When you have to put out an emergency statement to reassure everyone of your creditworthiness, it's already gone.
I do agree that First Republic is in a much better situation relatively to SVB, but illiquidity and insolvency risk is real. I don't really see a reason why any business or individual with more than $250K shouldn't be wiring funds out ASAP, unless you're feeling extra charitable and want to be the bail-in to those who run before you.
There is nothing to lose, other than setting up new accounts.
- zzleeper 4y agoOff-topic but it really BAFFLES me why people don't pay more attention to FHLBs. It's like we don't learned anything from the last 10 crises...
- colechristensen 4y agoEverybody got bailed and and essentially nobody went to jail. Of course no lessons were learned. SVB though sounds like nobody should go to jail it was just really bad investment decisions.
- WatchDog 4y agoThe CEO of SVB sold $3.6 million of stock a couple of weeks ago. I’m sure the SEC will have some questions about that. https://fortune.com/2023/03/10/silicon-valley-bank-ceo-greg-becker-3-6-million-stock-sale/ https://fortune.com/2023/03/10/silicon-valley-bank-ceo-greg-...
- mortehu 4y agoBased purely on the amount and timing, it looks pretty typical for him compared to the last 20 years: https://www.secform4.com/insider-trading/1259867.htm https://www.secform4.com/insider-trading/1259867.htm
- WanderPanda 4y agoCan't they claim the money back if you withdrew shortly before the insolvency anyways?
- ok_dad 4y agoSure but that takes time. Time that you have to spend that money as quickly as possible on valid business expenses in order to be indemnified from the claw back.