All bankers are wankers – discuss.

[cheb]

As a final footnote, this from the MorningStar:

The morning star? That's a far left extremist paper and I'm not just saying that as a wind up....

Yes, and useful as such to add to the various viewpoints of any situation so as to form a balanced opinion.

[gremlin]

The morning star? That's a far left extremist paper and I'm not just saying that as a wind up....

It's also a financial media source In fairness, I should have dropped 'the' for grammatical correctness.

https://www.morningstar.com/en-uk/try/free-direct-trial

A financial media source!

Please explain?

Is the link not working for you?

[Greenman]

It's also a financial media source In fairness, I should have dropped 'the' for grammatical correctness.

https://www.morningstar.com/en-uk/try/free-direct-trial

A financial media source!

Please explain?

Is the link not working for you?

No it's a pay for site, how ironic!

[weeksy]

A financial media source!

Please explain?

Is the link not working for you?

No it's a pay for site, how ironic!

So is this site.... well, not for the freeloaders

[Cousin Jack]

As a final footnote, this from the MorningStar:

The morning star? That's a far left extremist paper and I'm not just saying that as a wind up....

Yes, and useful as such to add to the various viewpoints of any situation so as to form a balanced opinion.

Balanced opinion? We don't want no stinking balanced opinion, we want viewpoints that confirm our prejudice.

[wheelnut]

These first paragraphs are simplistic and might bore you.
Some of the Silicon Valley Bank’s Silicon Valley customers were having trouble with their own businesses, so they withdrew money. The bank had to sell bonds to pay those customers. Those bonds had lost value because more recently issued bonds have higher interest rates. SVB had been behaving badly by staking too much on rates staying low and depositors’ contentment.

When it became known that SVB was selling bonds at a loss, other depositors also tried to withdraw their money and it became a run on the bank.
.

That’s partly true but not the whole story. My understanding (which could be way off) is their issues were more to do with the nature of their client base. A lot of their clients were cash rich, didn’t need (and probably wouldn’t qualify for) loans. Therefore SVB were left sitting on a big pile of cash that they had to do something with in order to generate a revenue.

As you say they stuck it into long term bonds which they became very dependent on. All their eggs in one basket and then interest rates went up rapidly. What else could they have safely done with the cash? My view is that they were more of a victim of their business model rather than any malfeasance on their part.

[JackyJoll]

Yes, it looks like having too many clients too much like each other was one of their problems.

[Ant]

A side grind of bankers.

[gremlin]

What else could they have safely done with the cash? My view is that they were more of a victim of their business model rather than any malfeasance on their part.

They could have hedged their govt bond exposure with Interest Rate products. Swapped out the fixed rates vs. float or buy IR Caps. As a buyer of caps your downside is limited to the premium paid, yet the payout unlimited if rates go against you.

You're right re the client base. Cash rich and more tech savvie than money men. The FDIS covered them up to $250k. Many had multiples of that sat in accounts. They should should have spread the risk by moving funds to other banks or bought T-Bills.