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They can buy longer duration bonds and sell them before the loan is due or even corporate bonds. Yes, it introduces certain risks, but with the endemic banks i
by fuoqi 4y ago
They can buy longer duration bonds and sell them before the loan is due or even corporate bonds. Yes, it introduces certain risks, but with the endemic banks irresponsibility constantly bailed out by the government, I will not be surprised. But I guess, possible spreads are a bit too small for this scheme to matter.
- agrajag 4y agoI mean, SVB did exactly this, and management got fired an equity zeroed out. Other banks aren’t looking at SVB and wishing that was them.