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At the time they were purchased, central banks around the world were going out of their way to assure people that rates would not be going up for a long time.
by cal5k 4y ago
At the time they were purchased, central banks around the world were going out of their way to assure people that rates would not be going up for a long time.
Not excusing their failure to properly account for duration risk, but regulators didn't see this coming either - what they were doing was considered to be not only wholly acceptable, but downright "safe".
- olivermarks 4y agoIt was naive, lazy and dangerous of SVB to assume in a 10 year window nothing would change IMO
- mhb 4y agoDon't forget greedy. Not hedging saves money.
- eep_social 4y agoCentral banks have been telegraphing rate increases for over a year. Your statement might have been true on the day of the purchase but SVB had an entire year to fix their mistake and failed to do so.