I agree - I dont see why it cant be done either...it's just a question of what it would take and cost to do it.
Silicon Valley Bank (SVB) Collapses
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I agree - I dont see why it cant be done either...it's just a question of what it would take and cost to do it.
In the interest of disclosure, I just learned a startup I'm invested in has an account with SVB. The reported balance is covered by FDIC limits.
And also too, there should be different level of protection with respect to ongoing capital requirements (payroll, payments to suppliers, etc.) and those of speculation (the bonds that SVB invested in).
Scott
My advice would be to only bank with the Big Boys and possibly split between a few accounts at a few banks. You're not going to get FDIC insurance covering all the money but if one bank goes down all your eggs aren't in the same basket - you also have another bank to quickly move funds to should you hear something is going on.
I don't deal with that much money although with taxes and 401k contributions coming up this time of year we'd be over the $250K in our operating account and so have a savings account at a different bank.
We do that now. Well mid size and big boys..
Service from the big boys is alsolutely terrible.
Recently BOFA did everything they could in their power to not allows us access to to our own money.
Owner of the company had to fly across the country personally walk into the lobby and demand his money for what should have been a mere xfer.
Exactly. There were calls to nationalize the consumer banks in 2008, then let the investment banks go do their thing. If the investment banks failed no one would care. But this was thought to be a bad idea. In fact, they let investment banks become bank holding companies so they could get fed bailout funds. So here we are again.
Where on earth were the regulators the last 9 months when they had no risk management exec?
This whole thing is crazy weird. No oversight, no warning, fed closing it mid day. Nothing to see here, get back to work little workers.
Short term perhaps, as a way for a public company to grow. Over time those products will life cycle out, execs will retire, but the corporation is, by definition, a living and breathing thing that is supposed to go on.
The way owners, aka shareholders make money, is through effective stock management. Products (and people) be ****ed.
As you well know, Silicon Valley is a riskly place. I was lured away to a startup with 10,000 options at $11 that was sure to go public in a year and a half. Well, less than a year later it was over. Numerous people waited as the bank honored pay checks, groups at a time. Let's just say that money was lent by friends to get people through... The CEO was back in Maui in his mansion with an elevator and full time servants. I'm sure he didn't miss a golf date.
If my advisors did this I would fire them.
4WD
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There are other sides - a bank CEO that I know grew the company well (M&A) but as he approached a certain size the Feds would have him making risky loans - so they stopped M&A … Downsized a bit …
Again, the bankers did nothing wrong as they were not beholden, due to 2018 deregulation.
The bank examiners should have spotted the problems long before this happened. This entire affair smells. There needs to be an investigation and the responsible parties need to be held accountable (which is something that didn't happen in 2008).
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Sure, it was a desperate attempt to maintain liquidy to cover outflows. Similar to what someone might do with their retirement account just before losing their house or declaring bankruptcy. This was all really precipitated by Moodys threatening to downgrade them. No one wants to sell devalued bonds early and my hope is the larger banks have a more diversified portfolio and greater reserves such that they can hold their bonds until maturity.
Right. Having a heavy bond position with rising interest rates may not be smart if you don't have a ton of cash too but it's not illegal or criminal. Had Moody's said nothing there would've been no run, no selling bonds for a loss, and we wouldn't be having this conversation.
In retrospect, they should've placed a whole lot more cash in their Federal Reserve acct and collected the Fed payments instead of lending it all to startups. Can we take this opportunity to thank bank deregulation again?
the good time tolerates bad decisions while the bad time fosters good decisions; rinse and repeat!
Sounds like the usual topic one will hear from some news media. Has anyone specifically mentioned which regulation that was done away with caused all this?
There is a lot more to the story than this.
https://www.forbes.com/sites/mayrar...-silicon-valley-banks-demise/?sh=136d5d383432
https://www.newsweek.com/trump-era-roll-back-bank-regulations-resurfaces-amid-svb-collapse-1787112
Basically, the 2018 deregulation means SVB was reclassified and no longer had the same liquidity requirements and stress testing as it did under full Dodd-Frank. Insufficient liquidity is the primary reason why SVB imploded.
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How Moodys is in business after the sub prime meltdown is a bigger mystery than where Jimmy Hoffa is.
"TRIPLE A RATING"
Load of huey.
Blaming failures on lack of regulation, even if true, is just excusing more regulation.
https://www.wsj.com/articles/regulators-to-hold-auction-for-silicon-valley-bank-9c05701f
Had Dodd-Frank remained intact, SVB would've had higher reserve requirements, performed stress testing, and had more access to liquidity.
Did you read either article? Wait...I already know the answer...
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