2 ms·
The underlying root cause of the SVB failure is mismatch of investment horizons for a bank's assets relative to its liabilities. The groupthink at the moment i
by vivegi 4y ago
The underlying root cause of the SVB failure is mismatch of investment horizons for a bank's assets relative to its liabilities.
The groupthink at the moment is phew, the Fed, FDIC and treasury swooped in to save the day (and the depositors).
But, the root cause lurks.
How many other financial institutions are sitting on leveraged assets similar to SVB and might fail a slightly tougher stress test?