Gerry557 wrote:As a HSBC shareholder I'm not sure if it's a quid we'll spent.
Maybe for my other holdings it might give a sense of security
The risk as I understand it is that SVB had no risk manager for the prior year, and the new one observed the liquidity risk, the CEO sold all of their shares/Options and only then made the announcement - that sent SVB into a nose-dive. Smaller banks don't have to mark their bond holding to market, so deposits were covered, just not the bank-run where the bonds became liable to being sold (marked to market - after yield rises/price declines). Held to maturity and no bank-run and SVB would have been fine.
If, as I suspect HSBC can, cover withdrawals via its own liquidity channels, then its buying many bonds for £1, that if held to maturity will yield a great return for HSBC. I can't see HSBC enduring a bank-run such that it will be a good earner/reward for HSBC. In effect maybe £££billions of bonds bought for £1.
The recent HSBC share price is aligned to the rest of the market, so suggestive that the market in general doesn't see it as a bad move for HSBC. But equally not a great thing, I guess in the scale of HSBC the size/value of SVB is loose-change, such that the share price hasn't relatively outperformed either.
In having diluted the SVB risk away, the hundreds of tech companies who in effect used SVB as a depository (and were massively exposed to no cover of their deposits) will also see that risk evaporate.
The main losers will be SVB share and bond holders. Otherwise pretty much a non-event now that HSBC has bought it out.