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Breaking down the full context of the sentence makes it easier to parse

>notionally hedged against

on paper, SVB had protection from...

>...interest-rate duration risk

the danger that rising interest rates would mean it lost money on long term bonds at the historic (low) rate...

>...by this hold-to-maturity strategy,

using a common financial technique that valued the assets in question at their final value, not their current market value...

>that strategy put those assets outside the circle of those available to meet unexpected withdrawals

however, doing so meant those bonds weren't available if they needed immediate cash



Excellent explanation; I think understand the whole situation better thanks to you.


Getting a little more specific, notionally hedged means that Assets (the banks investments, originated loans) > Liabilities (deposits). But as you said, on paper.




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