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Part of me wanted to believe that SVB's failure wouldn't lead to real financial losses for the FDIC. That there was a weird panic bank run, and then the steady

Part of me wanted to believe that SVB's failure wouldn't lead to real financial losses for the FDIC. That there was a weird panic bank run, and then the steady hand of a regulator was needed, but there really were enough assets. Not saying I studied the data and concluded that; it's just what I wanted to believe. $20b loss to FDIC insurance fund feels high. It still meets the technical definition of "no losses borne by taxpayers" but it's a lot of money. I've gotta believe it's among the largest ever if not the largest ever losses borne by the FDIC for a single bank failure. Distressing – some combination of having been in denial about just how screwed up SVB was financially, paired with concern for what this will mean if the dominos keep falling.

Lazare 3y ago
It is a weirdly high number. I can only assume it represents some sort of conservative "worst case" estimate, but so far I haven't seen any comprehensive breakdown. And yes, if it does cost $20b, it will be the most expensive single bank failure (exceeding IndyMac).
- bradleyjg 3y ago
  If only one thing comes out of this debacle it should be a ban on hold to maturity accounting practices.
  - Lazare 3y ago
    ...no, I really don't think that follows.
  - sokoloff 3y ago
    That is almost surely an excessive reaction. Limits (possibly to include prohibitions) on using H2M accounting to back demand deposits would be a more targeted (and therefore appropriate) intervention.
    - deleted 3y ago
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  - blitzar 3y ago
    When Is a “Mark” Not a Mark? When It’s a Venture Capital Mark https://a16z.com/2016/09/01/marks-offmark/ https://a16z.com/2016/09/01/marks-offmark/