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Some of the other large regional banks also have a very large proportion of deposits above the FDIC insurance limits, and are also sitting on hold-to-maturity p
by VagueMag 4y ago
Some of the other large regional banks also have a very large proportion of deposits above the FDIC insurance limits, and are also sitting on hold-to-maturity portfolios which can't be liquidated to satisfy a large deposit outflow without incurring losses which would wipe out the banks' equity.
- impulser_ 4y agoMost banks are fine. They aren't gambling like SVB did. Ofc it's a VC bank gambling like a VC. SVB had ~40b in short term liquid assets. They had ~100b HTM securities. 210b in total assets. Nearly half of their assets were in HTM securities. You aren't going to find many banks with half their assets in HTM securities even banks holding a lot of HTM securities. SVB had 170b in deposits which is a short term liability. So they only had 40b in short term assets to cover 170b in short term liabilities. That's the problem. The problem isn't HTM securities. The problem is diversification.
- deleted 4y ago[deleted]