[skippyboxedhero]

They have also been marked down already, that is what the big unrealised losses are about.

I am not 100% sure what the accounting rules for htm vs afs are anymore. I believe htm allows you to amortize losses over the term of the loan (which is, of course, still as controversial as it was in 2008). But SVB has already taken fairly substantial markdowns already on securities that were transferred into htm after they dropped significantly.

And the purpose of receivership is to preserve value for depositors. So the problem is that the losses have absorbed the firm's capital, not that other sources of funding have taken losses. A book of MBS is not going to be trading at a 30% discount to the mark a few weeks ago when their financial period ended. All of this stuff is liquid, unless their corporate lending was awful (unlikely) then there won't be a massive discount.

Btw, this did happen last year in the UK. The BoE essentially left the market to sort out problems caused by higher rates/falling bond prices, and hedge funds absolutely rinsed pension funds. Some made hundreds of millions in a few hours. This won't happen in this case because FDIC has stepped in and is running a proper auction.