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Only inasmuch as they knew other VCs and depositors would be panicking in response to the signal. There's another possible stable equilibrium where no one pani
by ummonk 4y ago
Only inasmuch as they knew other VCs and depositors would be panicking in response to the signal.
There's another possible stable equilibrium where no one panics because they know no one else will panic and that the bank is solvent.
- caddemon 4y agoWell SVB can't raise the interest rate they pay to depositors much without taking a bath, and I don't see why someone would want to keep their money in the bank once it is paying a notably lower interest rate than most other banks. Maybe some more time or wider spread of people wanting to withdraw would've kept them alive long enough to salvage something. But they put a huge amount of their money into this bond that they will be stuck with for a long amount of time. I dunno bank run almost just seems inevitable here.