One issue with this approach with SVB liquidating everything is that suddenly a lot of bonds are going to be sold, and this creates a big risk to have depressed assets prices, and prices of the bonds spiraling down further if there are no buyer on the other side.
This is what happened during the Kerviel scandal in France, when Societe Generale tried to unwind the risky positions of a trader.
Unless the government steps in and decides to purchase these bonds that SVB is selling and add them on its balance sheet... Which essentially would put the burden on the random non-Silicon Valley guys who didn't ask for anything (and it's not fair).
The other thing, is that many companies don't need 100% of their cash. They may just use SVB as storage, and waiting for the bonds to mature may be totally fine rather than take a loss.
Also, during this interval that they have to wait. If capital is needed, VCs may have better capabilities to raise capital at good conditions, rather than a failed bank.
This is what happened during the Kerviel scandal in France, when Societe Generale tried to unwind the risky positions of a trader.
Unless the government steps in and decides to purchase these bonds that SVB is selling and add them on its balance sheet... Which essentially would put the burden on the random non-Silicon Valley guys who didn't ask for anything (and it's not fair).
The other thing, is that many companies don't need 100% of their cash. They may just use SVB as storage, and waiting for the bonds to mature may be totally fine rather than take a loss.
Also, during this interval that they have to wait. If capital is needed, VCs may have better capabilities to raise capital at good conditions, rather than a failed bank.