What characterizes the small banks / credit unions that you think they've invested as poorly as the defaulting banks did?
Nothing particularly other than they aren't the big 4. From everything I'm seeing about SVB is that it wasn't that they didn't have assets to cover their customer's money. What appears to have happened was an (((orchestrated))) bank run (weird?) that cause SVB to not be able to have the money necessary (in the immediate sense as withdrawals happened) due to their investments being 10 year rather, which from a talk I heard was common and would yield more $ in the end but carried higher risk as we see.
For everything else that isn't in a risk prone position it feels to me like it will "cascade" into bank runs from smaller less "viable" banks to move to one of the big 4 which I've seen many people state is already happening to some degree.
Small town banks/credit unions (1-3 branches), I don't think are managed as riskily nor would they be targets of orchestrated bank runs. Perhaps the regional ones though are worth the squeeze
When you vote at the credit union, always vote no against increased security allocation. Else, move your money.
It was simple, they had enough assets, but a significant amount was in long term treasury bonds. If they held them to maturity, their balance sheet would have been fine. But their value on the open market was less than face value because no one wants to buy a bond giving 1% when they could buy one at 5%.
If the Fed wants the easy solution, they'll just guarantee the face value of treasury bonds. Then companies will stop worrying about liquidity in these smaller banks.
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