Reply to I don’t know how banks work

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[quote=Anonymous][quote=Anonymous]So this SVB situation is going over my head. :([/quote]

The SVB situation is quite simple.

The bank placed itself in a precarious situation due to stupidity.

The management of the bank by its officers and board of directors is, in polite terms, referred to as "poor management".

The idiots running/managing the bank funds invested in long term, low interest rate government bonds in a rising interest rate environment.

Somewhat doubtful that more regulation can eliminate the type of lazy, half-witted stupidity exhibited by the managers and directors of this bank.

SVB bank officers spent the last month focusing on preparations for a LGBTQ+ celebration rather than focusing on the safe, proper, and efficient running of the bank.

When interest rates rose--just as the federal reserve had been telling the financial markets for many, many months--any low interest rate long term bond investments would be sold at significant losses in order to meet liquidity demands of the bank's depositers.[/quote]

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