4 ms·
If you mark to market the assets are less than liabilities. It’s unlikely government will keep to maturity a bunch of 30 year mortgages. At the same time, we sh
by ivalm 4y ago
If you mark to market the assets are less than liabilities. It’s unlikely government will keep to maturity a bunch of 30 year mortgages. At the same time, we should just make FDIC limit infinite and make depositors whole.
- comte7092 4y agoThe fed already has billions of dollars worth of mortgage backed securities on its balance sheet right now.
- ivalm 4y agoI mean sure, but when it transacts it will be marked to market, it won't be just valued at the original hold to maturity so fed will take a loss. Also, fed is trying to shrink its balance sheet, presumably.
- comte7092 4y agoI don’t believe the fed typically marks its assets to market, though I’d be open to a correction on that point. Typically they just roll off the balance sheet by letting assets mature and not re purchasing. They are indeed trying to shrink their balance sheet, but at the volumes they are working at, the entirety of SVBs assets amount to a few months of the fed’s current volumes.