Silicon Valley Bank: Mark to market and realized gains and losses

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AMONG the hand-wringing of the chattering class opposed to the Maharlika fund or whatever it is in the process of becoming have been histrionic claims about how even the bluest of blue-chip sovereign wealth funds, the Norway Oil Fund, lost $160 billion last year.

Now Warren Buffet's Berkshire Hathaway lost $22.8 billion last year as well . Then came the collapse of Silicon Valley Bank, a specialized bank much used and appreciated by tech startups and not just in the US, thanks to having to sell securities not marked to market, but held to maturity in an emergency need for liquidity and realizing actual losses.

The catch which partly cost some pain and surprise leading to a panicked run on the bank was that SVB was a specialized bank that ably but nearly solely catered to tech start-ups and the ecosystem around it like venture capital firms and private equity funds and their limited partners, managers and investors. First, they announced in a footnote to their year-end results that in addition to their mark to market losses, they had $15 billion of unrealized losses in their hold to maturity book.

 

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[ANALYSIS] Philippine market reactions after SVB fall'The BSP and the BAP say 'local banks have stable funding and ample liquidity' following the collapse of the Silicon Valley Bank in the US.' ThoughtLeaders
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