SVB as an excuse for any company turmoil is criminal. Literally nothing happened. Everyone got all of their money. If any company uses SVB as an excuse they must be named and ridiculed for lying.
that's the thing. SVB has a loan portfolio paying much higher interest rates. but if that loan portfolio is to a bunch of companies that are going to go bankrupt, then it isn't worth anywhere close to what it is on the books at.
the game here is very simple: SVB loans money to cash burning startups and they keep that money in SVB accounts, so it looks like they have cash, and it looks like SVB has deposits, but all of that is created out of thin air by SVB giving loans to companies that couldn't get them from a real bank. If those companies actually take the money SVB loaned them out of their SVB account, then the scam collapses.
I read that SVB in fact had lots customers who didn’t want/need loans, as they were depositing loads of venture money. That was part of bank’s problem.
At least so far the story is that SVB got in trouble because it invested in bonds that went down in value, not because of its loan portfolio. We’ll see if that is true or the whole story, but if it is true, the scenario is entirely different from what that article is suggesting.
The red carpet was rolled out to prevent anyone form being harmed by SVB... and zero lessons will be learned and we'll just do it all again, but with a different name this time.
Everything that happened meant SVB was supposed to fail and drag down all of it's high-flying customers with it. Yet... here we are, pretending this isn't a taxpayer guaranteed big bank bailout during a looming election cycle with record inflation we're also pretending isn't real.
Exactly. SVB has ceased to exist. The bank is not being bailed out. The depositors are. You know, the normal people who’s only error keeping money in a bank.
They had no plans, things changed, plans changed. It is completely valid to blame SVB for not hedging. It is valid to blame them for lobbying to loose up regulation over how much risk they can take too.
If anything is damaging trust, it is banks and investors lobbying to loosen up regulations, claiming the banks are too small to pose systemic risks and then ask for special exceptions the moment it does not work out.
You can make that argument, but just like a spherical cow, it has no bearing on reality. SVB and it's ilk offered the same non-existent interest rates as any other non-distressed bank.
that is a lie. the amount of money involved here is not that much. it would be very easy for a larger bank to swallow if they believed in the long term value of the assets.
the real thing is that SVB had an iconic brand, tons of business relationships, and very skilled and well connected employees, and yet none of that intangible value offset the hole in their balance sheet. that is the real indicator of just how bad it actually is.
The failure of SVB had nothing to do with extending loans to their client base.
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