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If you need money now and not in the future, there is cost. The fact that the principal gets paid at maturity is irrelevant - a risky bond does have interest ra
by RandomLensman 4y ago
If you need money now and not in the future, there is cost. The fact that the principal gets paid at maturity is irrelevant - a risky bond does have interest rate sensitivity, too.
- xmcqdpt2 4y agoOf course, that's why SVB failed. But the FDIC doesn't need the money now (well assuming they successfully stop the dominos from falling).
- RandomLensman 4y agoI would have thought that the deposits will leave SVB/what is left of SVB pretty soon, so the FDIC will need to cover that rather now than in the far future.
- ElevenLathe 4y agoThe point of doing this is that the deposits hopefully won't feel the need to leave. After all, the BoA account you were planning to move them to doesn't have a public letter from the Treasury Secretary saying it's insured to no limit by the FDIC.