to generate better yield they purchased a large amount, ~ $80bn! in mortgage backed securities (MBS) with customer deposits – Yes the same dreaded instrument that cause 2008 crash

On March 10, 2023

[Microblog]

>In 2021 SVB saw deposits jumped from $61.76bn to $189.20bn – read free cash startups got to grow
>to generate better yield they purchased a large amount, ~ $80bn! in mortgage backed securities (MBS) with customer deposits – Yes the same dreaded instrument that cause 2008 crash

— Abhay 🇸🇬🇮🇳 (@Abhay08) March 10, 2023

>In 2021 SVB saw deposits jumped from $61.76bn to $189.20bn – read free cash startups got to grow >to generate better yield they purchased a large amount, ~ $80bn! in mortgage backed securities (MBS) with customer deposits – Yes the same dreaded instrument that cause 2008 crash

>97% of these MBS were 10+ year duration with average yield of 1.56% >with FED’s interest rate of ~4.5% and increasing in 2023 > customers with deposits who were earning little less than 1.56% (bank spread) can now purchase govt backed sec with >4.5% yield

RT @compound248: 1. When banks accept deposits from clients, they OWE the client that money. So deposits are liabilities to the bank. Liab…