[Alberta's Child]

I’m no expert on these matters, but it seems to me that the easiest course of action from the Federal government would be to have the U.S. Treasury buy all of SVB’s bond holdings out on a dollar-for-dollar basis. SVB’s custodian would then pay out all of the depositors in full, then sell off the remaining assets (cash plus loans on the books) on the open market.

[rolling_stone]

so what will that cost usgovt/us taxpayers? 100 billion? more? will that mean they have to do the same for the rest of the banks in similar situation?will that encourage more mismanagement?

[rollo tomasi]

I don’t think anyone is an expert at fixing this.

Might as well be a person without arms and legs along with an IQ of 30 trying to dig out of a 1,000 ft hole. Some “stuff” will be thrown on the wall, still going to be future hurt with the amounts required to salvage/correct the situation.

I just hope whoever works in risk and investment management sectors at SVB never be allowed in those fields again.

[Dilbert San Diego]

I’ve heard conflicting things.

I heard one report saying that this bank had a strong balance sheet, but the problem is that it was insolvent, couldn’t sell off enough bond holdings to get cash for the depositors who were withdrawing money.

If that’s true, and the assets are in balance with the liabilities/deposits, then everyone eventually would get made whole. Even those with account balances over the $250K FDIC insurance limit.

They wouldn’t get made whole immediately, but eventually, they would get their money.

Which in that case, is very different from everyone assuming that all account balances over $250K are just gone and will never be recovered.

Of course, it’s too early to know yet, if anything illegal was going on in that bank , which led to their problems.

[pepsionice]

Could the treasury, on it’s own....offer a dollar-for-a-dollar rate? Or would this require House/Senate consent?

I would agree...some deal like that, and a quick sale of the bank...might lessen total market disturbances. Biden though...isn’t the guy to really clear up the mess and give confidence.

A lot of this is attached to SVB strategy for stock-holders. I’m wondering what other banks went down this bond path and bought the same investment strategy. Are there more like them?

[Presbyterian Reporter]

“””I’m no expert on these matters, but it seems to me that the easiest course of action from the Federal government would be to have the U.S. Treasury buy all of SVB’s bond holdings out on a dollar-for-dollar basis.”””

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Are you saying that the FED should buy the SVB bond holdings at par???? Even though those bonds are now only worth 60% or less of their par value?????

Please explain.