Submitted by Loud_Adagio2222 t3_11txs83 in nottheonion
jointheredditarmy t1_jcmaumd wrote
Reply to comment by AttractiveNuisance37 in SVB blames remote work for bank failure by Loud_Adagio2222
So it’s been a while since school but I seem to remember it would not have. Treasuries are always considered risk free for capital calculation purposes. When rates go up 5 points in 9 months it’s anything but risk free. The thinking is that even if you have a duration mismatch, it will converge at some point, since the treasury will get paid back at some point, and that’s true until you have a bank run.
BirdsbirdsBURDS t1_jcp4odc wrote
“Markets can remain irrational longer than you can remain solvent”. Can’t help but feel this lesson was learned before. Not too long ago.
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