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I don't think we know yet if SVG was solvent until FDIC realises the sales on their assets. I don't think FDIC would have seized it if there was 0% chance it w

I don't think we know yet if SVG was solvent until FDIC realises the sales on their assets. I don't think FDIC would have seized it if there was 0% chance it was insolvent In fact, i think it's clear creditors and shareholds are going to be wiped out, so that means they _were_ insolvent, even if their assets are able to cover their deposits (deposits are not their only liabilities) Also I hope you aren't using the definition of solvency that ignores the time value of money, because that's nonsense

jmyeet 4y ago
I mean solvent as having a positive book value based on the market value of their assets. The government requires banks to maintain various ratios. A certain percentage in liquid assets to cover withdrawls, etc. The big problem was in 1 day 25% of their deposits were withdrawn. Literally no bank can sustain that, from JP Morgan down to your local community bank. The Feds seized SVB because it fell out of compliance with its required ratios but it still had a positive book value for the assets it had.