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Comment by chasd00 | Hacker News Reader

I just got an email from Mercury saying they’re well capitalized and all is well.

“ I want to assure you that Mercury is in a strong financial position (profitable and well-capitalized), and we have a number of ways that we keep deposits on Mercury safe:”

Uhoh.

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"As long as everyone doesn't try withdrawing their money all at once, everything will be fine. So don't panic..."

Isn't this true of every bank since fractional reserve became legal?

Fractional reserves have never been illegal; the practice predates government monetary policy. The alternative would be a vault or safety deposit box.

Is there any bank out there that can survive a panic bank run?

Yes, if you count central banks and don’t mind hyperinflation. But that’s probably not what you’re asking. I don’t think any ordinary commercial or retail bank could survive a run without outside help.

Sure, as long as the bank makes a cryptocurrency to back up deposits

JP Morgan Chase, Bank of America, Citibank, and anyone else who will be bailed out by the fed.

But seriously, the problem with SVB was that their assets are trash and everyone knew it. If their assets were actually worth what they claimed they would have no problems.

I don't know about that. I think it's more that they never hedged their interest rate risk (or they invested in assets that were too long duration).

This is not the same situation as dogshit assets from the sub-prime crisis; the bonds are not "trash" in the sense people are thinking, but long-term, lower interest instruments. As interest rates have risen they are a relatively poorer invesment, but still have the long-term (illiquid) value of the underlying asset less the curret rate to return differential. It's inaccurate to say they mis-stated the value of their assets.

Yeah, that sounds bad.

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