So many posts/tweets/articles about the $SIVB meltdown but no one is explaining/breaking it down for the masses to understand.
Firstly, Silicon Valley Bank Was The Largest Banking Failure Since The Global Financial Crisis In 2008.
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The bottom line of the collapse was due to poor risk-mgmt. Instead of just buying short-dated T-bills or depositing with the Federal Reserve they bought long-duration fixed-income securities. This caused an asset-liability mismatch —> liquidity issues —> bank run —> collapse
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They then failed to manage interest-rate risk by simply not hedging their exposure at all, they had $120Bn of securities. When interest rates went up they took a massive $1.8Bn loss on their available-for-sale bond portfolio. They had $80Bn in bonds with yields of 1.5%!!!🚨