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Say they have 90B deposits and 100B in long term treasuries Once that 100B falls to 95B due to interest rate hikes they could sell them all and buy 95B of shor
by shawabawa3 4y ago
Say they have 90B deposits and 100B in long term treasuries
Once that 100B falls to 95B due to interest rate hikes they could sell them all and buy 95B of short term treasuries instead, insulating them from any further rate hikes
- namtab00 4y agoThey would sell 95B of 10-year MBSs, but ho would buy them?
- runeks 4y agoOther banks will buy them at the right price (ie. less than what SVB paid initially).
- runeks 4y agoHow is that different from just buying short term treasuries, instead of long term, in the first place?
- shawabawa3 4y agoIf rates don't go up then you get better yield with long term treasuries