Reply to I don’t know how banks work

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[quote=Anonymous][quote=Anonymous]This ⬇️ My big question— Were depositors aware that their money was invested in long term, low interest treasuries? Liquidity in saving/checking is just that. They chose to dump well over the 250k FDIC insured into single accounts. It’s such a simplistic mistake and one has to wonder who was watching the fig tree.

[quote]
To continue--and to repeat my prior posts above--it does NOT matter what type of business SVB's main clients operated. It does NOT matter that VC (venture capital) money dried up. It does NOT matter that payrolls needed to be met.

All that matters is that the bank failed to match up the liquidity rights of its depositors with the investment terms of the bank's investments. (If you understand this very basic concept, then you should be able to understand that the SVB bank officers and directors were derelict in their duties--that SVB officers and directors "don't know how banks work".

SVB business clients always had payroll obligations and typically have funding needs. All of this could have been handled by SVB since it was ADEQUATELY capitalized, but it failed because it was NOT PROPERLY capitalized.[/quote][/quote]

You understand.[/quote]

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