[loeg]

Why would that be relevant here? The worst case depends on the failed bank's assets vs deposits. SVB's assets are worth significantly more than 50% of deposits above $250k, so depositors will get a bigger percent of deposits back.

[thephyber]

I wouldn’t be so quick to write off the mention of other fire sales.

SVB’s assets may look good on paper, but they couldn’t sell those assets in the past few months or weeks, which is the prelude to Thurs/Fri.

I think the more important questions are: (a) are the assets actually there and fairly valued? (b) can anyone actually sell the assets quickly for near their current states value in the open market?

I think people underestimate how much prices swing when the assets are that large, there are few possible buyers, and everyone in every investment company is re-running their models this weekend with the assumption that SVB’s woes might also be independently happening in other larger banks.

[loeg]

They couldn't sell them without becoming insolvent, because selling them would transition them from Hold-to-Maturity to Mark-to-Market. I don't think there's any difficulty selling 10-year MBS notes at market prices (at some discount to their HTM accounted value).