Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! What Happened at SVB? I want to start by saying I’m no banking expert. Before last week I didn’t even know what the term “held to maturity” meant (more on that later). I’ve digested as much as I can, and tried to summarize what led to SVB’s collapse. Please spot out any errors in my description below as I’m still learning!
Couldn't SVB access Discount Window borrowing and avoid selling some of their HTM portfolio to meet the withdrawal demands and avoid locking in their loss?
Using the discount window is usually seen as a sign of weakness amongst the banks. If word got out that SIVB was using the discount window, it could have resulted in the same end result...depositors getting nervous leading to a run on the bank.
Couldn't SVB access Discount Window borrowing and avoid selling some of their HTM portfolio to meet the withdrawal demands and avoid locking in their loss?
Using the discount window is usually seen as a sign of weakness amongst the banks. If word got out that SIVB was using the discount window, it could have resulted in the same end result...depositors getting nervous leading to a run on the bank.
But isn't the identity of the bank who uses the discount window disclosed 2 years after it is used?
super insightful! fyi there is an #N/A in the "Top 10 EV / NTM Revenue Multiples" chart
SVB bought things that require long term holding and unfortunately it cost the company