Why has no financial group stepped up to buy the assets and assume the liabilities of Silicon Valley Bank? This would be the typical approach by FDIC and regulators. Their assets were high quality US Treasuries, so the only real issue was the uncapitalized mark to market losses. This was not a solvency issue, it was a liquidity mismatch.
Why aren’t the Venture Capitalists offering to recapitalize, provide bridge financing, or help in some other way? They are calling for a bailout, yet they also took $45B out of the bank on Thursday, which caused the collapse.
Before the capital flight on Thursday SVB assets were worth around 90% of purchase value, so the bank could have been assumed.
Before concluding a bailout is warranted, two important question should be answered. Why did businesses have so much on deposit at SVB, and should they have been aware of the excessive risk?
It is ironic that some of the startup projects underway were for “Decentralized Finance”, which is an effort to create a new financial system outside of our current regulatory framework, and these same founders and investors are now calling for a bailout.