Silicon Valley Bank (SVB) Collapses
- Thread starter The Critic
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I read both.
It's just fundamentally wrong to assume a couple things. Number one is that any bank that flouts the rules at a low level will somehow not ignore them at a higher level. The other is this magical assumption that such regulations are a good thing. To big to fail and all that. Garbage should fail. Period.
The second article, well both really, are just political hit pieces. I mean why didn't the magical crew that had the White house, senate and hr, for two years, just put in 3X regulation and make us all feel good and happy?
I had no idea anyone or any company had $100million + in a bank account that was ever at risk of failing. I just assumed there was something special that was done with all that cash.
It’s not that more regulation is always better. It’s that specific regulation is sometimes needed. Regardless of your philosophical view on regulation in general, the fact is more capital reserves/access to liquidity and stress testing, all of which were in place for SVB under Dodd-Frank and removed in 2018, would’ve likely prevented this outcome. Those regulations weren’t in Dodd-Frank for the heck of it - they were specifically chosen after 2008 because this was totally foreseeable and likely outcome of not having it. It’s not lost on me either the crooks who are now responsible for this who lobbied to have it removed.
Good point..the FAA probably could relax rules a little also...what the heck..if plaines crashed more folx would just choose another airline to use.
Agreed. Also, all those golden parachutes need to be outlawed, executive salaries capped at X times average employee salaries, bonuses for failure outlawed, and criminal penalties for failing fiduciary duties enforced to the fullest extent.
If your bank fails and you're in leadership positions and have mismanaged assets, you go to prison.
There's a reason banking and finance requires regulatory licenses. I know, I used to have the Series 7, Series 63, 65, and a bunch of others. So, keep in mind, these people are gambling with PUBLIC money. Mine. Yours. Doing so irresponsibly should be penalized in civil and criminal courts, not rewarded with bailouts, bailins, bonuses, etc. The first place all these depositors should be made whole from is seizing all assets of every executive in decision making positions.
Want to put a stop to most of the corruption in banking, finance, company stock deals, etc. then start putting them in prison and disgorging every penny of their wealth.
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In an article today, CNN reports that U.S. banks are sitting on an unrealized loss of $620 billion in bonds and securities bought when interest rates were low. I don't think this story ends with SVB.
Maybe it's because I'm an old timer that lived through the previous interest rate spikes and massive inflation of the late 70s and 80s, but I could never see how buying long term bonds at low interest rates was going to work out. I laughed at the financial planners that recommended bonds when the interest rate on them barely covered management fees.
Maybe it's because I'm an old timer that lived through the previous interest rate spikes and massive inflation of the late 70s and 80s, but I could never see how buying long term bonds at low interest rates was going to work out. I laughed at the financial planners that recommended bonds when the interest rate on them barely covered management fees.
Plaines??
When did I say all regulation is bad? So typical. Equating all the over-regulation in Dodd-Frank with FAA? That's a pretty crazy straw man, but you knew that.
People and financial institutions like that don't deserve any kind of "bail outs". Let them fail and learn a lesson IMO.
If you don't know about the 2018 legislation you are not paying attention.
Beyond that, perhaps read Mr Greenspan's book.
Sometimes yes of course rules and laws are needed. But such laws also need extremely harsh penalties that are equally and consistently enforced.
All the regulations were not removed. It's speculation that they would have complied and none of this would have happened. But let's say they were for a moment. SVT was the 17th largest bank in the USA. I really don't think number 18 and back have no idea what their liabilities and assets are. Nor are they all relying on the value of US treasuries and cryptocurrency. IOW they are all not being reckless. SVT was reckless.
Yup, but they all had enough money by 35 to never have to work again and so there are no lessons to be learned by them.
Certainly, deregulation alone does not explain SVB but it certainly seems to have played a permissive part in this happening. I've seen no evidence that banks mandated to comply with capital reserve requirements and stress testing do not. Maybe bank #18 chooses to go above and beyond statutory requirements and perhaps not. There were still unique circumstances with SVB but that doesn't mean regulations requiring minimum reserves and stress testing wouldn't have helped to prevent this outcome. While all the regulations weren't removed, the two most likely to prevent this were. Why? If capital reserve requirements are reduced banks can lend that money and SVB was making a ton of money loaning to startups. If you don't stress test you can claim ignorance and plausible deniability that your reserves were insufficient. It was 100% greed and I argue regulations that deal specifically with greed are probably the only regulations we need.
Apparently nobody wants the trouble that is presented to them.
https://www.cnbc.com/2023/03/12/pnc...egulators-struggle-to-find-rescue-buyers.html
https://www.cnbc.com/2023/03/12/pnc...egulators-struggle-to-find-rescue-buyers.html
Sold whole is preferable but they can always auction it off in pieces - after all there is likely still a lot of value left in those loans.
Antitrust action should be taken on all of the big banks.
There are folx who would rather crash in a plane than loose a ton of money that wasn't necessary..they are not that far apart..might even be a suicide or 2..yea..its only money..
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What are your thoughts? Do you have a cause and effect?
Sure, but the C level could have been held responsible. That's the point.
Now they just run away fat dumb and happy.
The losers are the companies that cannot make payroll, and the people who aren't getting paid. Then there are the landlords; it goes on and on.
Uh they violated laws. Why are you saying they didn't?
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