Silicon Valley Bank Failure [pdf]
am.jpmorgan.com
Silicon Valley Bank Failure [pdf]
1–10 of 152 posts
Re: Silicon Valley Bank Failure [pdf]
#2"The liabiity issue: extreme reliance on institutional/VC funding rather than traditional retail deposits While capital, wholesale funding and loan to deposit ratios improved for many US banks since 2008, there are exceptions. As shown in the first chart, SIVB was in a league of its own: a high level of loans plus securities as a percentage of deposits, and very low reliance on stickier retail deposits as a share of total deposits. Bottom line: SIVB carved out a distinct and riskier niche than other banks, setting itself up for large potential capital shortfalls in case of rising interest rates, deposit outflows and forced asset sales..."
Re: Silicon Valley Bank Failure [pdf]
#3the irony of this whole situation is VCs and startups pouncing on the chaos to encourage people to move their money into even more opaque neobanks eg Mercury/Brex/Ramp as if they don’t have the same issues with relying on VC funded startup deposits but even worse in that their balance sheets are hidden.
Re: Silicon Valley Bank Failure [pdf]
#4I am surprised they show JPM in all their comparison charts (typically research doesn't cover their own employer). By showing JPM as an outlier on the opposite of the spectrum to SVB, it feels a little bit like a marketing document.
Re: Silicon Valley Bank Failure [pdf]
#5I think we’re too accustomed to startups here to recognize that SVB was actually assuming quite a bit of risk.
We acknowledge most banks don’t want to touch startups and that startups will have a harder time banking in the future. Yet I don’t see much consideration for the fact that there is a good reason most banks see startups as risky. It’s just explained away as “they don’t understand .”
Also consider the past 10 years have probably been the friendliest 10 years to startups ever.
Re: Silicon Valley Bank Failure [pdf]
#6I am surprised they show JPM in all their comparison charts (typically research doesn't cover their own employer). By showing JPM as an outlier on the opposite of the spectrum to SVB, it feels a little bit like a marketing document.
JPM is a massive bank, they don’t need to market.
Re: Silicon Valley Bank Failure [pdf]
#7> The liabiity issue: extreme reliance on institutional/VC funding rather than traditional retail deposits
Unsurprising how the bank failed due to the VC driven mania and now that the pyramid scheme collapsed right in front of everyone; taking the majority of startups in the tech industry with it.
Now we will see how unprofitable these startups really are and have been fully dependent of constant VC cash. A very big lesson to learn about risk.
Re: Silicon Valley Bank Failure [pdf]
#8ELI5?
Re: Silicon Valley Bank Failure [pdf]
#9I am surprised they show JPM in all their comparison charts (typically research doesn't cover their own employer). By showing JPM as an outlier on the opposite of the spectrum to SVB, it feels a little bit like a marketing document.
JPM is a massive bank, they don’t need to market.
Coca Cola & Red Bull are massive, they surely have tiny marketing spend… Right?
Re: Silicon Valley Bank Failure [pdf]
#10This really sheds clarity on the situation. SVB was in bad shape long before the run, and there is no apparent next domino to fall. FDIC limits are very well understood and relatively easy to work with (despite the rampant FUD about “who’s going to use multiple bank accounts”, deposit sweep programs are highly available and convenient). This is a risk management failure by depositors (in addition to the bank of course), and should be treated as such.