I actually wonder if that’s why the uk arm of svb was able to be purchased but the US one wasn’t. It’s probably just the relative size differences but I’m curious if the fdic got no bids for svb or didn’t get any it liked.
My dad also was the lead in his bank purchasing other banks in the 90s, and that was a months long, tiring and stressful process that they knew how to manage, and he said that receiving a bank from the FDIC was a different level of acute stress.
Edit Just unlocked a memory, I think one of the reasons that my dad's bank got selected was also that they ran the same backend banking software, since it was going to be a crash acquisition.
It can not be overstated just how important this would have been. These backed systems are complex, expensive and horrible. Implementing a (mondern) new backend at a bank is a multi year multi $10million process.
https://www.bloomberg.com/news/articles/2023-03-12/fdic-auct...
Another is that SVB UK could be solvent so long as they don’t have to sell assets at a loss. Being part of hsbc stops the assets needing to be sold at a loss. And a separate thing is that even if the assets net liabilities are negative, the customer relationships could be valuable enough to hsbc to counteract that. Hsbc get a load of growing companies whom they can try sell banking services to. That assumes customers don’t all flee, but I don’t think they would because there isn’t a particular reason to fear hsbc in the way there was for SVB.
I don’t know what the commenter meant about JPM printing money.
Borrowing in the maket at 5% so you can keep the bonds paying 1% for the next 10 years might not seem like a "loss" but it is a loss.
There is a much lower chance HSBC experiences a bank run. Not to jinx it but the most likely outcome is that most customers are satisfied that HSBC is a well-capitalized bank and keep their money there, while HSBC gets to use their deposits and the bank's assets to sit comfy earning yield.