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by pseudo0
1194 days ago
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That assume that the bank can keep their depositors while offering uncompetitive interest rates on deposits. For example, a bank that bought 3-12 month t-bills could offer depositors 4% interest on their savings accounts and still make a profit. Why would anyone leave their deposits with SVB for the next ten years if they can only afford to offer 1.5%, because they made a bad bet on long duration bonds? Sure, banking has a fair amount of inertia, but eventually people realize that they are leaving FDIC insured money on the table. |
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Chase is still offering 0.01% on savings accounts, and somehow has deposits. 1.5% is generous compared to that, even though it's much less than you can get with a little shopping around.