How Did A $200B+ Bank Collapse In 48 Hours? Is Real Estate Going To Be Impacted?

Market Trends & Data

3yFollow

How Did A $200B+ Bank Collapse In 48 Hours? Is Real Estate Going To Be Impacted?

https://www.biggerpockets.com/blog/how-did-svb-collapse-in-48-hours

BiggerPockets TeamPro Member

Member since 2026 · 14k+ posts · 5 votes

0 Reply

48 views

34 Replies

Jump to latestLatest

Sort by

Christina Zimmerman
Appraiser · Knoxville · Member since 2020 · 21 posts · 7 votes
3y
Good article. Thank you
0 Reply
Alisha WilsonPro Member
Rental Property Investor · Austin, TX · Member since 2022 · 12 posts · 6 votes
3y
This is a great article! Thank you for explaining it so well.
0 Reply
Jason WilwertPro Member
Member since 2021 · 5 posts · 0 votes
3y
There is nothing that the Federal government does where the taxpayer does not foot the bill. . .whose money do they think they ARE using?
0 Reply
- Dave MeyerPro Member
  Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 355 posts · 829 votes
  3y
  Their public position. Is that they will sell SVB assets or 'a special assessment on banks' whatever that means lol
  Podcast Guest on Show #186
  0 Reply
Bradley Matt Peck
Member since 2022 · 1 post · 0 votes
3y
Well written article, thank you for posting it. This will be a subject to keep an eye on as it develops.
0 Reply
Amber Forkey
Property Manager · Watertown, NY · Member since 2021 · 142 posts · 78 votes
3y
Excellently explained.
0 Reply
Andres M.
Rental Property Investor · Staten Island, NY · Member since 2017 · 76 posts · 13 votes
3y
Dave, I've read a few articles explaining what happened with SVB but yours is the easiest to understand. You da man! Thanks.
0 Reply
- Dave MeyerPro Member
  Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 355 posts · 829 votes
  3y
  Thanks so much!
  Podcast Guest on Show #186
  0 Reply
- Hassan Ali
  New to Real Estate · Chicago, IL · Member since 2023 · 3 posts · 0 votes
  3y
  totally agree!! Broken down simply to the basics (fiiinally!)
  0 Reply
Ann Bellamy
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
3y
Good straightforward and simple article.
0 Reply
Phillip Godkin
Investor · Nashville · Member since 2023 · 1 post · 0 votes
3y
I have heard some opinions to the fact that this is the start of the Federal Government nationalizing the banking system. Thoughts?
0 Reply
- Dave MeyerPro Member
  Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 355 posts · 829 votes
  3y
  I don't think there is any evidence of that right now
  Podcast Guest on Show #186
  0 Reply
Josh Randall
Real Estate Investor · Titusville, FL · Member since 2013 · 121 posts · 26 votes
3y
Dave, you said you've "read some fairly detailed analyses of other banks’ balance sheets, and it seems that, for the most part, other major banks in the U.S. are in much better positions than SVB and Signature Bank." However, I thought depending on how a bank's assets are classified they don't have to update their balance sheet showing major drops in asset values, so couldn't things be much worse than they appear?
0 Reply
- Dave MeyerPro Member
  Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 355 posts · 829 votes
  3y
  Chase Asset Management released an analysis of major bank holdings adjusted for current values of bond holdings to based on Chase's own analysis, which is what I was looking at. SVB is by far the worst of the group
  Podcast Guest on Show #186
  0 Reply
BiggerPockets TeamPro Member
OP
Member since 2026 · 14k+ posts · 5 votes
3y
Damn good article I actually understood the topic.

Originally posted by FNALSOLUTION.
0 Reply
Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
3y
The problem is with mid-level banks that were deregulated in 2018. Bring the regulations back and we will be fine. Of course with today's House that won't happen.
0 Reply
- Dawn Vought
  Buy and Hold Investor · Commack, NY · Member since 2008 · 358 posts · 33 votes
  3y
  They were not deregulated. The threshold amount requiring them to undergo a Stress Test analysis was raised to be over about $250B. The same regulations applied though.
  0 Reply
- Bryan O.
  Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
  3y
  Curious how investing in bonds is considered a problem and was only allowed due to deregulation in 2018. SVB was considered very conservative compared to most other banks.
  0 Reply
Steve TsePro Member
Member since 2021 · 102 posts · 16 votes
3y
So the question is what should companies or investors do when they need to park over $250k ?
Should they spread the funds among many different banks and get FDIC protection ?
0 Reply
- Dawn Vought
  Buy and Hold Investor · Commack, NY · Member since 2008 · 358 posts · 33 votes
  3y
  Yes!
  0 Reply
- Joseph Dorwart Crane
  Member since 2023 · 2 posts · 0 votes
  3y
  Mercury Bank (not actually a bank, but a banking platform) has FDIC insurance up to $3M because when you deposit with them, they spread it across several partner "actual" banks. This is a super easy option.
  0 Reply
Ron English
Member since 2023 · 1 post · 0 votes
3y
Very well written!
0 Reply
Nick Dallaire
Developer · Boston, MA · Member since 2011 · 14 posts · 6 votes
3y
Glad I took time to reads this! Great article. Lots of useful updates. Thanks!
0 Reply
Kayla Givens
Lender · Denver, CO · Member since 2021 · 244 posts · 253 votes
3y
Thank you for sharing - this was super insightful and I love that you took the time to explain how banks work!
0 Reply
Sacha Allen
Investor · San Diego · Member since 2019 · 28 posts · 7 votes
3y
Great article! Thank you.
0 Reply
Amir Elgaali
Real Estate Consultant · Atlant GA / Iowa City IA / Dubai UAE / Cairo Egypt · Member since 2023 · 1 post · 0 votes
3y
Great Article, but the failing of these 2 banks added to the MESS we are in.
Can you explain the rest of the banking deregulation's that was done in 2018 ?
0 Reply
- Dave MeyerPro Member
  Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 355 posts · 829 votes
  3y
  Good idea for a future post! thanks so much
  Podcast Guest on Show #186
  0 Reply
BiggerPockets TeamPro Member
OP
Member since 2026 · 14k+ posts · 5 votes
3y
Wait a sec: Why is anyone bailing out depositors who had funds in there above the $250K mark? They knew that money was uninsured. They could have deposited it elsewhere. Also, why is anyone bailing out tech companies or VCs who made risky, greedy bets in 2021 based on what people were doing during the incredibly specialized times of a global pandemic? By 2021 (or whenever you could have guessed), every other industry was trying to make things "return to normal." I don't think that Zoom will go away, but things like airlines or commercial real estate would desperately like things to go back to normal. And Pharma was working hard on vaccines and treatments. It would great if all Americans had high-speed internet, but we are a couple of decades from that. So if you are a techno investor in 2021, you have to know that you are making a bet based on a specialized and short-term set of conditions.

Originally posted by goeswithoutsaying.
0 Reply
- Jason Merchey
  Investor · Hendersonville, NC · Member since 2013 · 757 posts · 282 votes
  3y
  Totally get your point. On the other hand, to do otherwise would conceivably result in a domino effect ending with the FDIC being unable to foot the bill for even <$250k investments. I think a better question is, why did regulators fall asleep on the job with SVB, and why did the governors who put the regulators in place allow themselves to be so influenced by banking lobby money?
  0 Reply
- BiggerPockets TeamPro Member
  OP
  Member since 2026 · 14k+ posts · 5 votes
  3y
  Yeah, I get the problem of a nation-wide (and global?) bank run. But I wasn't *arguing* that depositors ought to lose, SVP ought to fail and let everyone else with less than $250K deposited in anyone one bank rest assured that the FDIC system is alive and well, solvent and doing what it was designed to do: Insure the deposits of the "little guy." My question was a real one, not a rhetorical one. And my question was, actually, about another way to prevent a bank run. It seems to me that none of these little guys nor non-failing, not over-exposed, (risk-happy? unscrupulous?) banks need to worry about their deposits *if* they color within the lines set out by the FDIC. In other words, the other way to prevent a bank run is for those who played within the rules to continue to benefit from deposit insurance and allow those who were sure they could ignore those safeguards to bask in the consequences of their decision. Since I (read: me as an individual or me as a more conservative bank) don't have uninsured deposits, I don't have to care about what happens to SVP. But that only happens if the government doesn't ignore the limits imposed by the FDIC, bail out those banks who flouted them, and teach Big Banking (as well as, say, the Texas power grid) that staying within regulation isn't actually required because they'll be bailed out any way.
  
  Originally posted by goeswithoutsaying.
  0 Reply
Hassan Ali
New to Real Estate · Chicago, IL · Member since 2023 · 3 posts · 0 votes
3y
Hands-down the clearest explanation of what went down. Thanks for dumbing it down for this dummy :)
0 Reply
- Dave MeyerPro Member
  Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 355 posts · 829 votes
  3y
  It's complicated, you shouldn't be expected to understand this all! But glad it helped :)
  Podcast Guest on Show #186
  0 Reply
Forrest T Schue
Investor · Member since 2022 · 107 posts · 67 votes
3y
Thanks Dave! I think that on it's own this could remain a fairly isolated issue(I hope). Banks are businesses, this particular bank(s) had a bad business plan and failed. It's a harsh reality challenging the age old idea that banks are nothing more than a safe place to store your money. I expect that as long as everybody stays calm and informed, things will be just fine. Because like you said, bank runs are often the result of fear and panic. Which is often lead by uneducated emotions.
This article is a refreshing explanation that is not looking to get attention or views like your find especially on youtube these days. Thanks for that, and thanks for all the work that you do for us here on BP!
0 Reply
Christina Tsutsui-Tharp
Realtor · Central Oregon · Member since 2021 · 20 posts · 10 votes
3y
This was an excellent piece and helped me understand what is happening. Thank you
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.