5 ms·
Isn’t that exactly what SVB did? (EDIT - see replies below for why it is not)
by grey-area 4y ago
Isn’t that exactly what SVB did?
(EDIT - see replies below for why it is not)
- tome 4y agoNo, SVB invested in long term T-Notes or T-Bonds, not short term T-Bills. T-Bills have much less interest rate risk, because they have a maximum 52-week term.
- grey-area 4y agoThank you, sorry I was not familiar with the diff between T-bills and T-Bonds, now I know!
- Jtsummers 4y agoFrom what's been reported, SVB had money tied up in mortgage backed securities and T-Bonds (not bills) which take years to mature. T-Bills are different than T-Bonds. T-Bills mature in weeks up to 1 year (4, 8, 13, 26, 52 week terms). They're a good way to assign your money you can't risk (like next month's payroll) while still earning interest on it and having access to it when you need it.
- grey-area 4y agoThanks