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To be fair, the bank run is what made SVB insolvent. Prior to that, all they had was a liquidity problem. A rather big one, but if depositors hadn't bailed,
by auntienomen 4y ago
To be fair, the bank run is what made SVB insolvent. Prior to that, all they had was a liquidity problem. A rather big one, but if depositors hadn't bailed, SVB would just have had subpar growth for a few years.
- JumpCrisscross 4y ago> the bank run is what made SVB insolvent. Prior to that, all they had was a liquidity problem. The bank run exposed the insolvency. But it was already there. That’s why SVB couldn’t solve their problems at the Fed’s discount window. SVB lobbied for exemption from the Fed’s stress tests and Basel III that would have prevented this problem. The policy treatment is rolling back those changes so regional banks are covered.