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I think that isn't how it works. The fed just yesterday added the ability for banks to borrow nearly unlimited amounts against their assets. I do not think th
by bhouston 4y ago
I think that isn't how it works. The fed just yesterday added the ability for banks to borrow nearly unlimited amounts against their assets. I do not think this existed previously. It is an emergency measure.
- gizmondo 4y agoYou missed the important part - they added the ability to borrow while valuing collateral at cost. Previously it had to be valued at market price, which was not sufficient for SVB (because it was insolvent on the mark-to-market basis).