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Banking Industry health after Silicon Valley Bank collapse: Difference between revisions
Banking Industry health after Silicon Valley Bank collapse (view source)
Revision as of 20:02, 16 March 2023
, 16 March 2023→Mark to Market Losses
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SVB does not stand out as much in the distribution of marked to market losses. About 11 percent of banks suffered worse marked to market losses on their portfolio (Figure 2). In other words, if SVB failed because of losses alone, more than 500 other banks should also have failed. | SVB does not stand out as much in the distribution of marked to market losses. About 11 percent of banks suffered worse marked to market losses on their portfolio (Figure 2). In other words, if SVB failed because of losses alone, more than 500 other banks should also have failed. | ||
10 percent of banks have larger unrecognized losses than those at SVB. Nor was SVB the worst capitalized bank, with 10 percent of banks have lower capitalization than SVB. On the other hand, SVB had a disproportional share of uninsured funding: only 1 percent of banks had higher uninsured leverage. | |||
Out of the 10 largest insolvent banks ( A bank is considered insolvent if the mark-to-market value of its assets – after paying all uninsured depositors -- is insufficient to repay all insured deposits), 1 has assets above $1 Trillion, 3 have assets above $200 Billion (but less than $1 Trillion), 3 have assets above $100 Billion (but less than $200 Billion) and the remaining 3 have assets greater than $50 Billion (but less than $100 Billion). | Out of the 10 largest insolvent banks ( A bank is considered insolvent if the mark-to-market value of its assets – after paying all uninsured depositors -- is insufficient to repay all insured deposits), 1 has assets above $1 Trillion, 3 have assets above $200 Billion (but less than $1 Trillion), 3 have assets above $100 Billion (but less than $200 Billion) and the remaining 3 have assets greater than $50 Billion (but less than $100 Billion). | ||