What Really Brought Down Silicon Valley Bank and What Happens Next
The Investopedia Express with Caleb Silver
00:00
The Fed Raised Interest Rates Six Points
40% of the bank's balance sheet was in mortgage-backed securities. As interest rates rose over the intervening period to today, the price of those securities fell down into the high 70s. So what that means is that the bank was staring at a 20 to 30-point capital loss on those risk-free securities. And why did this happen? Because the Fed raised interest rates six points.
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