4 ms·
It’s not material. What matters is that principal is returned in full when bonds mature, but if you can’t wait until maturity you might have to sell them for l
by twblalock 4y ago
It’s not material.
What matters is that principal is returned in full when bonds mature, but if you can’t wait until maturity you might have to sell them for less than the principal. That is exactly what happened to SVB.
- kfrzcode 4y agoSounds like they needed more diversity in their overall capital portfolio; based on significant risk of these long-term bond rate increases -- is this a common tactic that would be employed at other banks, but it's just that SVB had a "special" system where customers would hold more money there or something? What's stopping my Local Bank from crashing this week?
- twblalock 4y ago> What's stopping my Local Bank from crashing this week? Enough consumer confidence to prevent a bank run is the only thing that prevents a run on any bank, including the largest banks in the world.