Silicon Valley Bank (SVB) Collapses

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GMFan said:
Everyone just relax. This is probably just the start of the second “once in a lifetime financial crisis” like 2008/2009 to occur in our lifetimes. At this rate, in another 15yrs, we’ll have another. Now back to your Netflix binging.
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Wait what? Sorry, I was binging Netflix. Is something happening? ;)
 
So I guess Signature Bank is now the 3rd largest bank failure ever. Gotten much less press so far anyway. $10B bank run this AM - so they say. They were also heavily exposed to Crypto supposedly?

Wonder if there will be any more before open tomorrow.
 
SC Maintenance said:
So I guess Signature Bank is now the 3rd largest bank failure ever. Gotten much less press so far anyway. $10B bank run this AM - so they say. They were also heavily exposed to Crypto supposedly?

Wonder if there will be any more before open tomorrow.
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Found this, not sure how big these banks are but it ain’t pretty… even banks that aren’t down a huge amount today are down pretty heavily compared to a week or even month ago.

Not looking like a “stop paying your bills” event though, so I’ll be at work like usual.
FC46D5B1-3C01-4E10-BD29-6C08C4BD40B7.png
 
So I kept digging and found out that SIVB did not have to undergo stress tests because they raised the deposit level of regional banks to $250B as the level where banks had to participate.

So SIVB didn't.

So I have changed my opinion on and have decided depositors should not be bailed out. If I had millions to stuff in a bank I would look at their stress test scores - there published every year by the fed for anyone to look at. If there too stupid to do so then that is on them - I no longer feel sorry for them.

So they should loose their money. If there is any money left after they give everyone up to $250K, they should simply take what's left and split it up.

Tough love is the best teacher.
 
SC Maintenance said:
So I kept digging and found out that SIVB did not have to undergo stress tests because they raised the deposit level of regional banks to $250B as the level where banks had to participate.

So SIVB didn't.

So I have changed my opinion on and have decided depositors should not be bailed out. If I had millions to stuff in a bank I would look at their stress test scores - there published every year by the fed for anyone to look at. If there too stupid to do so then that is on them - I no longer feel sorry for them.

So they should loose their money. If there is any money left after they give everyone up to $250K, they should simply take what's left and split it up.

Tough love is the best teacher.
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Several posts on this already. This requirement, which was part of Dodd-Frank, was rolled back in 2018. It also exemplifies that these executives can not be trusted to "do the right thing" because it would in fact be best for the business and if they aren't forced to do it with regulations they won't do it at all.
 
Folks, we have had to moderate (delete) over a dozen posts because of the political content.

While Congress has written legislation about the banking industry, and discussion of that legislation is OK, discussion of political figures, ascribing blame, etc. to them is not.
 
Astro14 said:
Folks, we have had to moderate (delete) over a dozen posts because of the political content.

While Congress has written legislation about the banking industry, and discussion of that legislation is OK, discussion of political figures, ascribing blame, etc. to them is not.
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Well the problem is that POLITICS has a lot to do with it... Esp. when one of them is on the board of directors that was part of Dodd Frank Act....
 
hrv said:
Well the problem is that POLITICS has a lot to do with it... Esp. when one of them is on the board of directors that was part of Dodd Frank Act....
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If your goal is to discredit Dodd-Frank entirely, simply because 12 years later one of its authors is a director at a struggling specialty bank that heavily depended on crypto, that is entirely a nonsensical political statement. Remove Frank from the discussion - can you not see how the Dodd-Frank regulation, more specifically the requirement for more reserves and stress testing, would've likely prevents the collapse of SVB? Does every mistake in your life discredit everything you've done prior to that mistake? Let's simply assess Dodd-Frank for what it is and not who wrote it. Let's simply assess the rollback of Dodd-Frank in 2018 and the effect of that rollback on what is happening now. Dodd-Frank is not inherently political unless you make it political.
 
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PWMDMD said:
If your goal is to discredit Dodd-Frank entirely, simply because 12 years later one of its authors is a director at a struggling specialty bank that heavily depended on crypto, that is entirely a nonsensical political statement. Remove Frank from the discussion - can you not see how the Dodd-Frank regulation, more specifically the requirement for more reserves and stress testing, would've likely prevents the collapse of SVB? Does every mistake in your life discredit everything you've done prior to that mistake? Let's simply assess Dodd-Frank for what it is and not who wrote it. Let's simply assess the rollback of Dodd-Frank in 2018 and the effect of that rollback on what is happening now. Dodd-Frank is not inherently political unless you make it political.
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Thats your opinion...not mine...
 
PimTac said:
Meanwhile, this story was cooking last week but someone put the lid on it. Don’t tell the peasants that a big bank is in trouble.


www.cnbc.com

Credit Suisse shares sink as 'material weaknesses' found in financial reporting

Credit Suisse said its net asset outflows had "not yet reversed," and that "material weaknesses" were identified in its financial reporting processes.
www.cnbc.com www.cnbc.com
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Credit Suisse has a non-stop history of scandals. They can only go about 18-24 months between scandals.
 
Mixing up a few things.

Acts (legislation) are typically written by lobbyists. An elected official(s) may be the sponsor, but it was a lobbyist that more likely than not wrote the act. The Dodd Frank act was written to impact (constrain) smaller financial institutions. The impact of the Dodd Frank act on to big to fail institutions was negligible at best.

The banking compliance lobby is primarily composed of the handful of too large to fail financial institutions. A major goal of the too big to fail financial institutions is to make compliance so costly, smaller institutions can't afford the labor and technology cost to comply and sell out to the too big to fail institutions.

Yes, community banks and credit unions do have a lobbying groups. But nothing of the likes of what the too big to fail financial institutions have. Kind of like comparing the power of the Toledo Mud Hens to the New York Yankees or Los Angelos Dodgers when it comes to broadcast deals.
 
GON said:
Mixing up a few things.

Acts (legislation) are typically written by lobbyists. An elected official(s) may be the sponsor, but it was a lobbyist that more likely than not wrote the act. The Dodd Frank act was written to impact (constrain) smaller financial institutions. The impact of the Dodd Frank act on to big to fail institutions was negligible at best.

The banking compliance lobby is primarily composed of the handful of too large to fail financial institutions. A major goal of the too big to fail financial institutions is to make compliance so costly, smaller institutions can't afford the labor and technology cost to comply and sell out to the too big to fail institutions.

Yes, community banks and credit unions do have a lobbying groups. But nothing of the likes of what the too big to fail financial institutions have. Kind of like comparing the power of the Toledo Mud Hens to the New York Yankees or Los Angelos Dodgers when it comes to broadcast deals.
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That's your opinion. Not mine.

Sorry, I couldn't help myself. No one said being a bank was going to be easy or cheap. It's also very hard to believe compliance is so costly and cumbersome that a bank with $210B in assets would be unduly burdened. This was the 16th largest bank, not the 502. If we don't want to have regulations then we simply need to agree to accept the consequences of smaller banks not having sufficient reserves and no stress testing.
 
PWMDMD said:
That's your opinion. Not mine.

Sorry, I couldn't help myself. No one said being a bank was going to be easy or cheap. It's also very hard to believe compliance is so costly and cumbersome that a bank with $210B in assets would be unduly burdened. This was the 16th largest bank, not the 502. If we don't want to have regulations then we simply need to agree to accept the consequences of smaller banks not having sufficient reserves and no stress testing.
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But who passed those regulations?
 
PWMDMD said:
That's your opinion. Not mine.

Sorry, I couldn't help myself. No one said being a bank was going to be easy or cheap. It's also very hard to believe compliance is so costly and cumbersome that a bank with $210B in assets would be unduly burdened. This was the 16th largest bank, not the 502. If we don't want to have regulations then we simply need to agree to accept the consequences of smaller banks not having sufficient reserves and no stress testing.
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I actually agree with GON. Remember Dodd - Frank originally had a $50B cut off. They quietly raised that to $250B in the dead of night when no one was watching.

For a small regional bank which could easily have $50B deposits it most certainly would be cost prohibitive, not simply by size but because the majority if their investments would be local loans, which would be really hard and time consuming for anyone outside to score. For a $200B investment bank, it shouldn't be, especially when most of their investments are 1.5% MBS's. Even stupid me can figure that one out.

I didn't pay too much attention to Dodd Frank, but before that in 2008 they not only blurred the lines between investment banks and bank holding companies - they threw the rulebook out. That was their primary mistake, which they have no intention of fixing.
 
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