MBS is not the problem here. It’s not 2008.
They bought bonds when interest was low, now interest is high and they’re worth less.
SVB wouldn’t have lost cash on those bonds if they didn’t experience a bank run.
They bought bonds when interest was low, now interest is high and they’re worth less.
SVB wouldn’t have lost cash on those bonds if they didn’t experience a bank run.
Not disagreeing that MBS is irrelevant, and yeah the risk rating of the bond wasn't a problem as this will pay what it said is would. Just saying it was a stupid move to buy such a large amount of such a long term bond when interest rates can't go anywhere but up and you're using borrowed money to do it. From that perspective it was a risky move.