[ryanSrich]

> So essentially it was all just panic

How? What was “all just a panic”? The bank run? Of course, that’s what a bank run is. People panicking to not be the last ones out the door.

Do not get this story twisted. SVB wildly mismanaged their risk, and went permabull in 2021/22. This lead to buying shit MBS’ and subsequently being forced to liquidate those securities to stop the bleeding.

[mlindner]

> Do not get this story twisted. SVB wildly mismanaged their risk, and went permabull in 2021/22. This lead to buying shit MBS’ and subsequently being forced to liquidate those securities to stop the bleeding.

Do you have any objective points on what they actually mismanaged and what they should have done instead for each point? Most of the people I see saying this don't actually understand what happened.

As someone said up thread. What SVB did was the "least bad option". The people to blame are the VCs and the fed for creating this situation by extreme devaluing of treasuries.

[isignal]

Banks do not park such a big fraction of their funds in such a long term investment.

They should have chosen a ladder of differently maturity timelines to trade off between yield and availability. For example, they could have invested more in short term treasuries instead, which yield 4.5% now.

In finance terms, they were not hedged against interest rate risk.

[rocqua]

Could perhaps 'park most of the money at the FED' been a safer option even without hindsight?

Ofcourse with hindsight pouring money into hedged stock positions would have been much better. But that is very much hindsight dependent.

[aardvarkr]

It’s not so much as mismanaged, which implies negligence, but more that they made a bad bet that kicked off a chain of events that led us to this point.

[IAmGraydon]

They didn’t buy MBSs. They bought 10 year treasuries.

[aardvarkr]

I think you need to double check your source. They had significant investments in MBS’s with a ten year maturity. SI had the t-bills