Why would SVB invest in something (T Bonds) that you’d need to liquidate to service withdrawals if the same problem that forced the scenario (higher interest rates drying up deposits within the VC space) makes your investment (T bonds value) worth considerably less. In other words, raising interest rates led to a major contraction within the venture capital space leading to major withdrawals and lower balances within SVB. To service the lack of cash then SVB is forced to sell their T bonds which consequently are less valuable as a result of the same catalyst (higher interest rates) that led to diminished deposits?
Essentially, your solution to a problem is an issue because your solution too is a problem for the same reason that your problem is a problem. Lol
I know that I am probably misunderstanding and/or making assumptions about the nature of this issue.
Please advise your opinion on my reasoning.
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