This report cites a paper that’s based on a very faulty premise.
One major omission by the authors that warrants discrediting the entire paper: “We do not account for possible interest rate hedges that banks could have entered, potentially offsetting decline in value due to interest rate change.”
What do you mean you don’t account for “possible interest rate hedges that banks could have entered”? This is standard fucking practice for almost every bank on planet earth except for SVB…wait.
You don’t think that could be a factor attributable to their demise do you?
Ok, so beyond this:
1. The study cited improperly assesses & attributes the cause of the SVB bank run & eventual collapse
2. This leads to a faulty assessment of other banks considered to be comparable
3. Published March 13th, 2023 before the govt + Biden administration announced the bolstering of reserves available for banks to tap if liquidity is needed
One major omission by the authors that warrants discrediting the entire paper: “We do not account for possible interest rate hedges that banks could have entered, potentially offsetting decline in value due to interest rate change.”
What do you mean you don’t account for “possible interest rate hedges that banks could have entered”? This is standard fucking practice for almost every bank on planet earth except for SVB…wait.
You don’t think that could be a factor attributable to their demise do you?
Ok, so beyond this:
1. The study cited improperly assesses & attributes the cause of the SVB bank run & eventual collapse
2. This leads to a faulty assessment of other banks considered to be comparable
3. Published March 13th, 2023 before the govt + Biden administration announced the bolstering of reserves available for banks to tap if liquidity is needed