SVB had a huge exposure to Treasuries. That’s one of the reasons it cratered.
No!!!! SVB had excess exposure to LONG TERM BONDS.
Banking 101 says don’t do that with low yield bonds. If SVB had more short term bonds there would be no collapse.
The problem is that many banks have their reserves tied up in now low yield treasury notes to varying extents that are declining in value. These banks need more real capital to stay solvent. The Federal Reserve is making life very difficult for the Treasury . Biden is oblivious and keeps spending. Old rule in banking. When governments print money, banks fail.
While I agree that is the proximate reason for the collapse, it speaks loudly of a much deeper problem.
When U.S. Treasuries become a toxic asset, the U.S. is in very serious trouble.
According to the Big Four auditor everything was perfect.
The “experts” never saw it coming....
One great Zero Hedge comment:
Big Four Audits are like vaxxes:
Safe and effective!