Interest Rate Swaps
Must be a fun market this morning. Can anyone comment on what’s going on here and what they’re seeing? My surface leve understanding is that SVB didn’t buy any to protect their downside on the HTMs, and that’s basically what killed them. Does it look like others are fine and protected by these swaps, or is there a sudden rush to buy these and bid them up?
bump
Saw a good tweet that talked abt this. SVB was essentially entirely unhedged, granted it wasnt just that that killed them, deposit flight was the real issue here IMO. BAML also pretty unhedged relative to other banks but their deposit base is so large and diversified that they’ll likely never need to dip into their HTM assets. Stock holders didn’t care much though, took a pretty good beating today rel to the other GSIBs.
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