Well… SVB took on a lot of interest rate risk (rather than credit risk, which is what we’re more used to banks blowing themselves up with). Then rates rose and

Well… SVB took on a lot of interest rate risk (rather than credit risk, which is what we’re more used to banks blowing themselves up with). Then rates rose and SVB were stuck holding long term fixed rate assets that weren’t yielding anywhere what they needed to. They probably didn’t see this as risk, since rates had been very stable for the last decade… but the mortgage market also sounded really safe in 2007. If they actually weren’t taking on risk they’d have bought short term bonds to avoid rate risk, but that wouldn’t have made them any money.