MrMan

those clauses are a sign that SVB and the VCs are in bed together and if you take their money and agree to these terms you are complicit too. the VCs used SVB loans to their portfolio companies to magnify the effective size of their funds without themselves taking on that leverage. SVB got massive interest income.

this is corrupt, the whole thing is corrupt.

there is no contagion except that spread by these fucking criminal VCs on twitter.

SVB was insolvent

this is so fucked I hate these evil SV libertarian crooks. this is wrong

the bank was closed by the FDIC due to insolvency

I am very interested in how that toxic loan portfolio is valued.

yes startups are a rickety vessel and they usually fail, we shouldn't pay for that

that's a lie. and if there is contagion it won't be stemmed by bailing you as a depositor out, we will need that money elsewhere to shore up the system. good luck to you

the depositors shouldn't get paid beyond what remains of the assets of the bank!!!

I mostly agree with this. these players should not be rewarded for using the deposits of the bank as a multiplier of their funds AUM, and the portfolio companies were pawns who willingly played along, or were ignorant and either way deserve to lose.

you are doing a pretty good job trying to explain away the officers of this bank running it into the ground. you havent even started to try to excuse their lending practices. what are you trying to accomplish? their CRO committed career-ending blunders and even with only short term securities on their books this bank could run into serious trouble simply by dint of their customer base all running into trouble at the same time, as is happening. why do you need to posture here man-splaining this shit incorrectly to people who dont know any better

buy side traders blowing up is a lot different than a bank blowing up so the risks are not the same

Yeah they can all burn

Ridiculous Shameful

I sincerely hope you get to live in a world without modern banking and you get a chance to reflect on how dumb this outlook is

venture debt with generous terms as well

SVB was an incompetently run bank whose major business model relied on outright cronyism. they deserve everything they get.

depositors are only entitled to what is left over after resolution of the assets, nothing more! dont make this situation worse by advocating for something unethical and which is bad for the entire system

HN is much worse than many sub-reddits. Look at the belligerent ignorance on display not just here, but that which is demonstrated by the VCs who seem to collectively lack a sufficient knowledge of finance and other things. The decline in quality is evident here, and it doesn't stack up well compared to places where people mostly know what they are talking about.

this bank stuck out as troubled far before this event

I think the chief risk officer at this bank left last year, they may have been the person who got the bank into these positions. it will be interesting to see if there is news coverage about that person's role in the crisis.

this is a lie, I am petty sure. why are you posting this stuff

that's not true -by "mostly" do you mean 70 to 80%? losing 20% of your principal is a huge loss

it is definitely insolvent

yeah its high comedy

nonsense - what banking innovations do startups need? is there really any such thing as a startup? or are we just talking about small businesses some of which grow into larger still unprofitable businesses? hopefully this mythologizing stops

the assets the bank held are worth some % less than the amount they took in deposits but its not 90% less, its something like 20%. so on average, people will get something like 80% of their money back. I dont think the asset price declines were catastrophic.

your last sentence is demonstrably false!

wow very solid. you could have found SVB in screen just by the LTD ration and HTM percentages and zoomed in from there.

they were offering 4.5%? that explains a lot in terms of their reaching for yield in low quality assets