It isn't like these banks are really that badly run. They've just inherently got interest rate exposure. It isn't like the 80s S&L crisis or the 2009 financia

It isn't like these banks are really that badly run. They've just inherently got interest rate exposure. It isn't like the 80s S&L crisis or the 2009 financial crisis where the paper was backing bad investments or mortgages which had defaulted. The problem is just interest rate risk and that the current value of the paper has gone down. That only creates a problem if the bank is forced to sell those assets, and if there wasn't a classical bank run then the bank wouldn't be forced to sell those assets. This is exactly the kind of borrow-short-lend-long risk that all banks inherently run and is why we supposedly have the FDIC to stop these kinds of bank runs. SVG had worse issues where their deposits were inherently draining due to the startups using them for their corporate accounts, and then they went out and sold some of their paper, booking their losses, instead of looking for financing. For those looking for the punish-the-rich morality play, the real winner here is likely to be JP Morgan or PNC which may bid to buy up the assets, which is just the rich-getting-richer and a large bank swallowing up a smaller community bank and more consolidation and monopolization of the financial sector.