Truth about this bank failure.

[Wildcat Will]

NPR

Silicon Valley Bank sort of violated the two basic rules of how banking is supposed to work. Banks do their magic by diversifying their asset risks, you know, having lots of different types of loans, in particular avoiding an overload in any particular risk. The one that they loaded up on too much was interest rate risk. If interest rates went up a lot, they were going to become insolvent. And they also - you're also - that's part of it, use asset diversification. You're also supposed to use diversified funding sources. These are the conclusions of my research in the 1980s that, you know, people cite as what's the theory of what banks are supposed to do.

[Wildcat Will]

Like SVB, roughly 90% of Signature's deposits were uninsured, Tenner said, meaning balances held by individuals or businesses were above the $250,000 insurance limit guaranteed by the FDIC. The mounting run on those deposits is what closed the bank. Someone could have stepped in to buy the bank, but that didn't happen. 

Barrons

[Wildcat Will]

Seems to me the personnel was more to blame than anything else.

Their policy, which was misguided, and the depositor's run to retrieve their funds are at fault.

[Troll]

3 hours ago, Wildcat Will said:

Seems to me the personnel was more to blame than anything else.

Their policy, which was misguided, and the depositor's run to retrieve their funds are at fault.

 

 

[Wildcat Will]

22 hours ago, Troll said:

 

 

You really must learn to multi task