Credit Suisse - Is it going to go bust, if so what happens?
Discussion
pquinn said:
Bluequay said:
Gecko1978 said:
Not credit Suisse but Silicon Valley Bank share price fell 61% yesterday a fall in mkt cap of 81bn in 1 day. Makes the bank bailouts in the UK seem tiny. An SVB have not asked for any FED support.
A banks share price and it's solvency are not necessarily related.I might add I also have worked at CS and it was different
Gecko1978 said:
Not credit Suisse but Silicon Valley Bank share price fell 61% yesterday a fall in mkt cap of 81bn in 1 day. Makes the bank bailouts in the UK seem tiny. An SVB have not asked for any FED support.
Sorry but how do you get a 60% fall of SVB representing a fall in market cap of $81 billion yesterday......?isaldiri said:
Gecko1978 said:
Not credit Suisse but Silicon Valley Bank share price fell 61% yesterday a fall in mkt cap of 81bn in 1 day. Makes the bank bailouts in the UK seem tiny. An SVB have not asked for any FED support.
Sorry but how do you get a 60% fall of SVB representing a fall in market cap of $81 billion yesterday......?
hstewie said:The problem with SVB was down to poor risk management of interest rate risk, something JPM are considerably more accomplished at!
It is being compared to the Orange County failure of '94..... they were poorly positioned for the post pandemic rise in interest rates, with low yielding, hold to maturity securities.
I am aware of some eye watering losses from portfolios at major banks since late 2022, however they are in a position to absorb such events.
The question is, as the curve moves around in it's inverted state will this bring to light serious problems at more smaller (relatively) financial institutions?
It is being compared to the Orange County failure of '94..... they were poorly positioned for the post pandemic rise in interest rates, with low yielding, hold to maturity securities.
I am aware of some eye watering losses from portfolios at major banks since late 2022, however they are in a position to absorb such events.
The question is, as the curve moves around in it's inverted state will this bring to light serious problems at more smaller (relatively) financial institutions?
clubsport said:
I am aware of some eye watering losses from portfolios at major banks since late 2022, however they are in a position to absorb such events.
The question is, as the curve moves around in it's inverted state will this bring to light serious problems at more smaller (relatively) financial institutions?
In theory, most 'normal' banks actively want higher longer term interest rates (although as you note the inverted yield curve is not a particularly good state for them). SVB are a bit of an outlier in that the way they had structured their balance sheet such that higher long term rates was much more detrimental to them as they didn't have sufficient offsets on their loan book for that.The question is, as the curve moves around in it's inverted state will this bring to light serious problems at more smaller (relatively) financial institutions?
isaldiri said:
clubsport said:
I am aware of some eye watering losses from portfolios at major banks since late 2022, however they are in a position to absorb such events.
The question is, as the curve moves around in it's inverted state will this bring to light serious problems at more smaller (relatively) financial institutions?
In theory, most 'normal' banks actively want higher longer term interest rates (although as you note the inverted yield curve is not a particularly good state for them). SVB are a bit of an outlier in that the way they had structured their balance sheet such that higher long term rates was much more detrimental to them as they didn't have sufficient offsets on their loan book for that.The question is, as the curve moves around in it's inverted state will this bring to light serious problems at more smaller (relatively) financial institutions?
they were poorly positioned for the post pandemic rise in interest rates, with low yielding, hold to maturity securities.
clubsport said:
As I suggested in part of my post you chose not to quote?
(honstly!) wasn't intended to mean anything. I simply copied down the 2nd part of the post. You were of course entirely correct that they were poorly positioned although if one might want to be pedantic, every bank holds plenty of low yielding, hold to maturity securities, but SVB got the balance of their assets in duration exposure completely wrong so it wasn't the holdings of low yielding hold to maturity securities in themselves that were the problem...
JQ said:
Catastrophic Poo said:
Timothy Bucktu said:
Neil McCoy-Ward talked about this here https://youtu.be/u2BtAJrvHqM
Note: He's a little too direct and to the point for some on PH to be able to handle I suspect. But he has some interesting insights into the financial world. Take it with a pinch of salt and come to your own conclusions.
He does have somewhat fringe views, and said there would be a 40% drop in property values 3 years ago.Note: He's a little too direct and to the point for some on PH to be able to handle I suspect. But he has some interesting insights into the financial world. Take it with a pinch of salt and come to your own conclusions.
Sells courses though, so thats a thing
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