Nearly half the money — $143 billion — went to holding companies for the two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets.
The people using SVB were often people who could not get loans from bigger, more mature banks. Think of all the completely useless apps and projects venture capital likes to fund. SVB also required loans to be deposited into SVB accounts. I'm no business or finance knower but there is no way I would go through with getting a shady loan that I have to keep at the shady bank so they can puff up their numbers.
The people using SVB were often people who could not get loans from bigger, more mature banks. Think of all the completely useless apps and projects venture capital likes to fund. SVB also required loans to be deposited into SVB accounts. I'm no business or finance knower but there is no way I would go through with getting a shady loan that I have to keep at the shady bank so they can puff up their numbers.
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My impression is they were likely keeping two books and counting those loans as new deposits, but maybe I'm giving their grift too much credit
Isn't that part of what happened with FTX or am I getting my financial entities in crisis mixed up?
I think it is, there's only so many tricks to be played