Mish 10 mars 2023
One problem for Silicon Valley Bank is that its customers had too much cash, and now they don’t.
If you were the Bank of Startups, the main service that you provided to startups is that equity investors would give them a truck full of cash and they’d deposit it at your bank.
So you have all this customer cash, and you need to do something with it. Keeping it in, like, Fed reserves, or Treasury bills, in 2021, was not a great choice; that stuff paid basically no interest, and you want to make money.
So you’d buy longer-dated, but also very safe, securities, things like Treasury bonds and agency mortgage-backed securities.
Matt Levine 10 mars 2023
Skicka en kommentar