The SVB collapse in perspective.

in svb •  2 years ago 

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A lot of bank failures during the Great Recession. But the Savings and Loan Crisis of the 80s was even worse in that respect. Good to put things in perspective.

Silicon Valley Bank was very large, but it was an atypical bank. The industry has changed a lot since the Great Recession. More to the point in 2008, it was the securitization that was the issue. The assets that the banks were capitalized with were much worse than the banks realized. SVB just was poorly hedged against interest rate risk.

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Likewise for Silicon Valley Bank by all appearances. This is generally why even uninsured depositors are made whole as the failed banks still have equity. This is in contrast to say FTX where many of the reported assets did not exist. FTX depositors may eventually be made whole, but I doubt it. The FDIC has already announced all SVB depositors will be made whole.

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