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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I think some of you should read more books.

1. SVB had a liquidity problem, not an asset problem. Failure had nothing to do with “bad loans” to Tech or Crypto. (If anything they were locked into “bad loans” to the US Govt in low rate Treasuries, which all banks hold at ridiculous levels because the law says USG debt is infallible and safe so banks must hold a lot… hmmm.)
2. Depositors insured and uninsured will recoup all of the money. Insured by Monday. Uninsured 50%+ next week, the remainder to follow. 
3. 97% uninsured deposits is a lot. But it has nothing to do with brokered deposits. Tech, VC, etc kept their cash there because SVB catered to those sectors and until the last few weeks SVB was adored for doing so. 
4. Systemic risk is minimal. This ain’t Lehman. There will be some ripples, but that’s it. No need to panic. [/quote]

Looks a bit like Continental Illinois [/quote]

TITCR[/quote]

No quite seeing the analogy to Continental Illinois--that bank failed owing to bad loans.

SVB was caught in the interest rate squeeze that they did not manage well.  Good management, however, would have pointed to modifying their business model by diversifying and focusing on making loans (preferably to nontechs) instead of buying securities.  It is unclear, however, whether the bank would have contemplated abandoning its all tech all the time model.[/quote]

I think the Continental Illinois analogy was based on SVB being a bank with massive concentrated exposure to a single client/narrow sector and unlikely to pose a systemic risk.  [/quote]

OP. Yes.  With the somewhat related question of whether there other financial institutions out there that look like the 80s S&Ls - with a significant fraction of their assets locked up in long/low interest rate assets...[/quote]

I’m OP and did not post this. I am assuming you meant DP. [/quote]

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