Correct me if I am wrong, but that's actually a smart move, because the securities cover these liabilities, no?
AFAIK, SVB has securities that are currently rated below their nominal value by the market. But these securities will reach their nominal value just before they expire, right? Essentially the fed is just offering a loan on these securities and values them at their nominal value because the fed doesn't care about market prices?
Sort of. This emergency liquidity program is only for one year but SVB has some 10-year stuff on the books. There could be losses, especially if rates continue to increase.
AFAIK, SVB has securities that are currently rated below their nominal value by the market. But these securities will reach their nominal value just before they expire, right? Essentially the fed is just offering a loan on these securities and values them at their nominal value because the fed doesn't care about market prices?