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> Fire sale means the selling of the assets pushes their value down. This is not that. It’s insolvency; the assets were and are worth less than their book value
by mlindner 4y ago
> Fire sale means the selling of the assets pushes their value down. This is not that. It’s insolvency; the assets were and are worth less than their book value.
As has been repeated many times, the bank was never and is not insolvent.
- JumpCrisscross 4y ago> the bank was never and is not insolvent Yes, it was, as declared by its regulators. Its balance sheet balanced. But its liabilities were worth more than its assets. If it weren’t insolvent, SVB could have borrowed at the Fed’s discount window. It couldn’t.
- MrMan 4y agothe bank was closed by the FDIC due to insolvency