People expect interest when they park a large amount of money in a bank. Where should that interest come from when the money just sits there? The bank will have to invest is somewhere (ideally somewhere very safe like in Government bonds) where they can then collect interest.
So it looks like in this case SVB chose MBS with a pretty low interest rate and long maturity, which they now have to sell due to the bank run you mentioned.
So it looks like in this case SVB chose MBS with a pretty low interest rate and long maturity, which they now have to sell due to the bank run you mentioned.