[civicsquid]

Past losses aside, the press release says that there are about $180B in deposits with the bank holding about $210B in assets. Assuming the FDIC liquidates and restructures the bank, I don’t see why deposits could not be made whole.

If there were fewer assets then deposits, then yes the 250k+ accounts are probably out of luck.

[oceanplexian]

The "assets" are actually held-to-maturity securities (bonds) that are yielding less than the risk free rate. Who would want to buy a bond that yields 2% when you can buy treasures that yield 4%. So while they might have $210B in paper assets but there's no chance they will be unable to unload them without taking a loss, putting the bank upside down.

[ok_dad]

> Who would want to buy a bond that yields 2% when you can buy treasures that yield 4%.

Whatever bank/organization that wants to have SVB's customers, probably. If an even bigger bank comes in, one which can take on those lukewarm assets for a decade without risk, then they can immediately position themselves as the "new SVB" and get a bunch of VCs and startups as customers. I assume that they could stand to profit some from such an arrangement, but I'm not a banker, so maybe not?

[petesergeant]

> Who would want to buy a bond that yields 2% when you can buy treasures that yield 4%

The government, to protect the economy

[Me1000]

The federal government doesn't need liquidity in the same way that a bank does, why would they even need to sell at all?

[bentlegen]

Will those assets still be worth $210B as the days tick by? I'm not a macro financial analyst, but I have to imagine trying to liquidate $210B of bonds, stocks, etc. will cause at least some of that value to fall – that's a big number.

[vineyardmike]

Once the FDIC kicks in they can sell off to a different bank which can absorb them without touching the open market. Alternatively the FDIC can guarantee the bank for the duration necessary to sell assets slowly. They could likely sell the bank as a whole to another bank if assets>liabilities without too much disruption.

[nemothekid]

If someone well capitalized buys the bank, then they don't need to liquidate. The bonds aren't worthless, they just trade much lower now that interest rates have risen, however if you can wait until they mature you will get your money + interest.