Charles Schwab has the liquidity to withstand a complete bank run, CEO says
Still, like SVB and many other banks, Schwab invested large amounts in long-term bonds, which have crumbled in value amid sharp interest rate hikes over the past year.
By the end of 2022, Schwab had more than $11 billion in losses on its bond portfolio, compared to tangible common equity of just over $6 billion, according to the Journal. But Bettinger said that Schwab has around $100 billion in cash flow on hand and the means to raise more than $300 billion via FHLB loans and the Fed's new liquidity program that was set up after SVB failed.
"Many times, when you're in a crisis, there's very little you can do," he said."It all comes down to what actions you had taken in preparation for that. We felt we had already prepared for this type of thing."Bettinger said that isn't because customers are leaving Schwab, but simply moving their money into"Clients aren't moving bank deposits out of Schwab," he said."All they're doing is realigning their investments, as they should.
Editor's note: The article and headline have been updated to reflect new information from the company.
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