Do they own any other banks? Time to short?
Turns out they used 2 of those 5% for investing in these banks.
It is not a disaster though, not even close to a disaster. And talking about banking and market economy, they most likely gained much more money from that than they lost. It just happened very quickly .
I think what they did was invest too heavily in up&coming banks rather than traditional banks. With the rationale that their technology was more modern.
The CEO of Alecta even said in an interview that the 50%+ drop of "First Republic bank" isn't a loss because it hasn't been realized yet. It wouldn't surprise me if he had to leave before the week is over.
Which institution can honestly offer any kind of product hedging against $620 billions of losses without, itself, going bankrupt should people try to exercise their hedge?
Basically the headlines, instead of being: "SVB goes down for it has $20 bn of unrealized losses" would be, instead, "SVB goes down for it has $20 bn of hedged unrealized losses, but the institution which is supposed to cover the hedge is bankrupt for it miscalculated and cannot cover $620 bn".