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[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]

1. Agree. Disagree with parenthetical--no law required them to hold all those Treasuries.  And SVB was not subject to liquidity rules which more or less cause banks to hold a lot of governments.
2. Agree with insured, but have no idea why you think uninsured will get 50% by next week.  What they will get has not been determined yet and is pending FDIC estimates of recovery value of assets.
3. Uninsured was probably more like 90 to 93%.  But just a quibble, either hay the percentage is extraordinarily high.
4. Agree with respect to systemic financial risk.  Agree with a previous PP that the more apt comparison is likely the 2000 bursting of the tech bubble.[/quote]

[b]The FDIC already announced they will pay an advance dividend to uninsured depositors next week.[/b]

The ratio of uninsured deposits is public. It was 97.3% on what I read, though that could have been 12/31. Either way it’s in that range. [/quote]

They did, but no where have I seen the amount of the dividend.  I think it is TBD.[/quote]

Correct. FDIC paid an advanced dividend of 50% at Indymac (maybe PP assumed a similar amount) but the amount for SVB is TBD and will be declared next week.

[url]https://closedbanks.fdic.gov/dividends/bankfind/Dividendindex?fin=10007[/url]
[/quote]

SVB’s assets massively exceeded (and still exceed) liabilities. Depositors will all be made whole. Historically, advance dividends issued in the 7-10 days after receivership have covered 50%-80% of outstanding uninsured deposits. So yes, FDIC will set the number based on specific estimates of what they expect to recover on the assets, discounted by a substantial haircut. But it’s going to be at least 50% and in all likelihood more like 75%. [/quote]

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