[chernevik]

In 2008 mortgage bonds were toxic waste looking for a bottom, today they're not nearly so bad. I doubt SVB had a team reading the tape on mortgages, so whatever they were buying must have been sufficiently standard as to be fairly liquid. (Unless they were COMPLETE idiots, which, I grant, is certainly does not seem impossible right now.) So I expect the question for most of it is interest rate risk rather than credit and pricing that isn't super complicated.

I would think SVB's book of startup/venture capital/commercial loans would be harder for most banks to value. They were a big player in that space and I doubt many have the expertise to do a fast read on that book.

Also, SVB's size is a real problem. There are only a few banks large enough to do this, and the regulators won't love the resulting consolidation.

They may sell it in pieces to deal with all that.

One big question is, does SVB have any franchise value? It really looks like their model depended on cozy relations with the VC community. You have to figure their whole board and C-suite will be replaced after this, how much of those relations remain after that? Nor am I sure players like JP Morgan can or want to play that game.

[yumraj]

> It really looks like their model depended on cozy relations with the VC community.

Which the VCs shat on, so not sure how much of coziness remains.

[chiph]

There may be coalitions of smaller banks being formed, where they agree to submit a single bid, and then internally split up the carcass into the parts they each want should they win.

I haven't seen the terms of the FDIC auction but I suspect it's winner take all, so any coalition will also need a plan how to split up or share the undesirable pieces.