Quote:
Originally Posted by dangerus_car
it's bad management, but then it's all JPow doing and SVB executives bad risk management. it's not like SBF reckless action. SVB bought long term bond that had low interests. Fed keeps rising interests rate and they didn't sell early to cut loss, then it came back as liquidity issue.
always sell early to cut loss than bag holding later
|
Buying long bonds against deposits was a mistake. The durations were vastly mismatched. Had they bought short-term treasuries, the yield would have been lower but they would have liquidated them at near face value and the crisis might have been averted. But there were other issues.