Silicon Valley Bank did invest in very high quality instruments, because they bought government treasury bonds, that was great, the problem was they stretched for yield at the time that they made the investments interest rates were higher on long-term bonds than on short-term bonds, so they invested in long-term treasury bonds. Problem was, interest rates went up after that and when interest rates go up the price of a long bond goes down. And so they had to sell those bonds at a loss when people started taking money outta the bank.
Generally you want to match the term of your assets and your liabilities, because when interest rates go up then the value of your assets goes down and your value of your liabilities goes down. So if you match them, then they move in tandem. But sometimes what people do is that they will invest their assets in a say a long term instrument because they get more yield and then they have shorter term liabilities and then when interest rates move, that can move against them.
