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No, it didn’t have a liquidity problem, it was insolvent. The value of all its assets marked to market are less than its liabilities.
by tigershark 4y ago
No, it didn’t have a liquidity problem, it was insolvent.
The value of all its assets marked to market are less than its liabilities.
- Lionga 4y agoNot if you let them do their shenanigans to let the assets be on the balance sheet on "face" value because they are in a "HTM" portfolio and not on the real market value. Many of the other banks are silently insolvent too, just the simple little account trick keeping them afloat. That's whats need to be changed, not a bail out of which more will follow
- boxed 4y agoWell... I guess. But the price of many of those assets were low because of the run right? So it's a self fulfilling prophecy. Banks that buy SVBs branches will be making money off that deal I think. Not short term obviously, but long term.