[runeks]

> They should have been rebalancing.

How would that have helped?

[shawabawa3]

Say they have 90B deposits and 100B in long term treasuries

Once that 100B falls to 95B due to interest rate hikes they could sell them all and buy 95B of short term treasuries instead, insulating them from any further rate hikes

[runeks]

How is that different from just buying short term treasuries, instead of long term, in the first place?

[shawabawa3]

If rates don't go up then you get better yield with long term treasuries

[namtab00]

They would sell 95B of 10-year MBSs, but ho would buy them?

[runeks]

Other banks will buy them at the right price (ie. less than what SVB paid initially).