With the FDIC auction underway, the Silicon Valley Bank Crisis may either be over or raging uncontrollably when you read this. I lean towards the scenario of excitement winding down, but at the same time, I know literally nothing about the quality of SVB’s asset book. Rather than speculate, I just want to point out what I see as key: credit market conditions (including wholesale funding) are the only thing the Fed really cares about. Even if one worries about other large regional banks, credit investors — and existing lending facilities for banks, like the discount window and FHLB advances — can pump money into the back door of a
Credit Matters
Credit Matters
Credit Matters
With the FDIC auction underway, the Silicon Valley Bank Crisis may either be over or raging uncontrollably when you read this. I lean towards the scenario of excitement winding down, but at the same time, I know literally nothing about the quality of SVB’s asset book. Rather than speculate, I just want to point out what I see as key: credit market conditions (including wholesale funding) are the only thing the Fed really cares about. Even if one worries about other large regional banks, credit investors — and existing lending facilities for banks, like the discount window and FHLB advances — can pump money into the back door of a