4 ms·
The wealth didn’t evaporate, it’s just tied up for a long time. The actual costs to the FDIC will probably be pretty low for SVB’s deposits.
by heartbreak 4y ago
The wealth didn’t evaporate, it’s just tied up for a long time. The actual costs to the FDIC will probably be pretty low for SVB’s deposits.
- kgwgk 4y agoThe cost may be pretty low but not because the FDIC will somehow get the nominal price for those bonds. They are not worth more than what they are worth. (On the other hand, they are worth more now than they were on Thursday.)
- heartbreak 4y agoWorst case scenario they’ll probably end up sold to the Fed and held till maturity like all the MBS the Fed bought during the pandemic.
- kgwgk 4y agoIf I'm not mistaken those were bought at "reasonable prices" - not at par.
- pclmulqdq 4y agoThe FDIC will probably just hold them to maturity and go running to congress if they need more liquidity at any time.
- Consultant32452 4y agoThere would have been a massive drop in asset prices for the companies impacted by losing their deposits.