Unlike the debacle surrounding the collapse of Sam Bankman-Fried's crypto kingdom FTX late last year, the sudden demise of Silicon Valley Bank last weekend has its origins at the other end of the financial spectrum.
That means the value of the bonds you hold changes. Sometimes, such as last year, the value plummets. Given the amount of US Treasuries on the SVB books, that should have caused alarm bells to ring.
According to former investment banker and funds manager Mike Mangan, SVB by December last year had notched up $US16 billion worth of write-downs on its $US57 billion government bond portfolio. Just like SVB, almost all of them hold a proportion of government bonds in their Hold To Maturity accounts.
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