The problem was and is banks invested long term in absurdly low interest income bonds.
Yes but with near zero interest rates for the past decade and inflation on the horizon even Stevie Wonder could have seen this coming. And he’s not a banking expert.
>The problem was and is banks invested long term in absurdly low interest income bonds.<
True.
SVB quadrupaled in size from 2020-2023. Most was invested in the low interest bonds even knowing that the Biden economy was printing trillions of dollars and stinging inflation was just around the corner.
This all smells of one hand washing the other. Someone had to pay for the ridiculous government spending by buying the bonds. Now the someone gets bailed out.
This had nothing to do with Trump since the big expansion happened after Trump left office.
EC
That is the crux of the issue. Long term bonds are not a hedge against short term liabilities. They got greedy and went for more profitability over safety and soundness. Where the HELL were the Regulators?