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PeanutSalsa t1_jcb1nas wrote

Why was 1.8 billion dollars in bond losses enough to make the bank insolvent? Where had all the deposits from clients gone to that they couldn't handle the bank run?

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politico OP t1_jcb5sy2 wrote

Hey there, Sam here: It had less to with the losses than it did the depositors' reaction to those losses. Remember this bank was pretty concentrated, venture's a big deal but it's also a little bit of a small world. So when word got out that SVB was taking steps to repair its investment portfolio, depositors -- startup founders, VCs, etc. -- fled en masse. $42B gone in a day -- likely would've been more if CA regulators and FDIC didn't step in. Hard to survive that kind of run.

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