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Reply to "List of 10 Banks that raised similar red margin flags to those of SVB"
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[quote=Anonymous]That article was super misleading because it's not primarily the same margin issue that caused SVB to fail. Lots of banks' margins went down because the value of long term bond holdings went down due to rapid interest rate increases. Banks do need to be attentive to this. What was unique about SVB is 1) it banks with a LOT of tech start ups that were experiencing cash crunches at the same time due to interest rate rises which triggered a bank run, 2) it used a merger with another bank to artificially change its margin requirements so its margin issues were more pronounced than the others. Something like 97% of SVB's money was tied up in accounts over 250k because is served so many businesses, a bank like Ally is nearly exclusively focused on personal individual banking. Not in the same universe. [/quote]
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