That question comes out often but... Apparently the $2bn realized loss that SIVB took was only about 1/10th of their total unrealized gains. Numbers are floating around now saying there's about $620 billion of unrealized losses among the various banks at the moment (due to the same issue of rates going up after trillions were printed).
Which institution can honestly offer any kind of product hedging against $620 billions of losses without, itself, going bankrupt should people try to exercise their hedge?
Basically the headlines, instead of being: "SVB goes down for it has $20 bn of unrealized losses" would be, instead, "SVB goes down for it has $20 bn of hedged unrealized losses, but the institution which is supposed to cover the hedge is bankrupt for it miscalculated and cannot cover $620 bn".
Which institution can honestly offer any kind of product hedging against $620 billions of losses without, itself, going bankrupt should people try to exercise their hedge?
Basically the headlines, instead of being: "SVB goes down for it has $20 bn of unrealized losses" would be, instead, "SVB goes down for it has $20 bn of hedged unrealized losses, but the institution which is supposed to cover the hedge is bankrupt for it miscalculated and cannot cover $620 bn".