But that’s a very standard ratio in banking. And to be blunt treasuries don’t decrease that much. In fact that’s not really what happened here. Instead, SVB had

But that’s a very standard ratio in banking. And to be blunt treasuries don’t decrease that much. In fact that’s not really what happened here. Instead, SVB had significant deposit inflows over the last 10 years as their VC back clients raised massive rounds. Their deposit base went from something like $60b to $180b. Then all in unison, as interest rates increased, the same inflows reversed and nearly 100% of their depositors started withdrawing. so SVB had to come up with massive amounts of cash and had to sell things at a loss. That would have been fine if panic hadn’t set in and a Run initiated. To play devils advocate, what would you have done as the CEO of SVB? Imagine over the last 10 years your clients are successful in raising large rounds and deposit the money in your account, you are required to keep those deposits safe and have to buy something. Would buying US treasuries and investment grade MBS be an unacceptable risk? They could have and should have hedged interest rate risk more perhaps but this isnt some irrational exuberance at work. To your point about skin in the game, a shareholders skin in the game isn’t the percentage of equity in the firm, it’s what that equity represents in their portfolio. If a shareholders entire net worth is worth