Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Urgent: Sign the petition now

ycombinator.com

Post reply on HN
Print view View original

301–310 of 864 posts

Re: Urgent: Sign the petition now

#301

Post by davidgerard »

garry wrote: post #191
toomuchtodo wrote: post #42

Earlier quoted context omitted.

SVB lobbied to not be regulated as strongly as other banks, and won. You would be perfectly fine at most other banks. This was a choice. https://www.theguardian.com/business/2023/mar/11/silicon-val... Edit: https://www.levernews.com/svb-chief-pressed-lawmakers-to-wea... > Eight years before the second-largest bank failure in American history occurred this week, the bank’s president personally pressed Congress to redu…

We are asking for new regulation that would prevent this from occurring.

That rule already exists. It's Basel III, and SVB was one of those who lobbied to have it removed for particular US banks in 2018. As you well know.

Here's the explainer for everyone else: https://archive.is/gmJxU

Re: Urgent: Sign the petition now

#302

Post by TuringNYC »

nocoiner wrote: post #131
jarym wrote: post #32

Earlier quoted context omitted.

Are you saying if I deposit more than $250k (which is NOT a lot for a business) into a reputable and regulated US bank at negligible rates of interest I should just accept the impact of the bank shutting down due to events unrelated to my actions and choices? And that my deposit should vanish into thin air?

Look up CDARS. There are well known cash management strategies that solve for exactly this set of circumstances. I’m not really sure why taxpayers are supposed to backstop CFO competence? But to answer your question, yeah, I think the equity in a for-profit business takes the risks and rewards of capitalism as they come. If the owners didn’t want to lose the basis points by holding cash in CDARS or liked the interest…

Awesome to hear about CDARS on this board. CDARS have only seemed valuable twice in my life (2008, and yesterday)...but that is how insurance-linked products are supposed to work. You only need them when you need them. But when you need them, it is darn good to have them.

Re: Urgent: Sign the petition now

#303

Post by WhatTheFlak »

axlee wrote: post #127
garry wrote: post #90

Earlier quoted context omitted.

These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.

There was nothing arbitrary about that choice. This bank promised better deals BECAUSE they were not careful enough about the risk it entailed. That was their competitive advantage, and they made bank for it. Well, tough luck, now it's not anymore: it has nothing to do with being a large bank or a small bank, it has to do with healthy business practices.

Wait so now everyone has to sit down and evaluate their banks balance sheet before trying to do business with them?

Silicon Valley Bank had nothing wrong with it's business practices other than they were concentrated in one particular industry, and a slowdown in VCs pumping money resulted in them shrinking deposits suddenly. They asked their investors for money, some VCs basically yelled fire in a crowded theatre and boom a 40 year old institution was wiped out in 24 hours.

America has thousands of banks, and the way you would have this work would shrink that to 5. This way of operation would also wipe out every single credit union. Literally none of them have the insane levels of stability necessary to trust with money, if larger accounts are going to be at risk of a bank run.

That 250,000 number hasnt changed in nearly a 100 years. Maybe it isn't what we should be going off of?

Re: Urgent: Sign the petition now

#304

Post by muyuu »

tikkun wrote: post #157
nocoiner wrote: post #8

LOL, nope. Not interested in taking another spin on the “privatize gain, socialize loss” merry-go-round. The banks had to be saved in 2008 because they were, like, the financial system. I don’t see why private companies and funds that are much less integral to the functioning of the economy as a whole should be saved by the public fisc. Sorry about your disruption.

Disagree. People who invested in SVB should be wiped out, probably. People who deposited in SVB should not be wiped out. Depositors in banks aren't expected to do due diligence on the financial statements of the bank they're depositing in. Have you read the 10-K filings of your bank in detail?

the regulations say only $250K are insured per account

smaller depositors should be ensured by the FDIC

you can, and should, have accounts in different banks if you have over a quarter million in US$

Re: Urgent: Sign the petition now

#306

Post by skwirl »

baq wrote: post #292
skwirl wrote: post #123

Earlier quoted context omitted.

>No, you should insulate yourself from that risk, either by spreading out your cash between multiple institutions, or obtaining deposit insurance beyond the government's, or (most likely) both. Why would I do that when I can bank with a too-big-to-fail bank like JP Morgan Chase, Citibank, Wells Fargo, or Bank of America?

That’s the point?

The point is that everyone should bank with four too-big-to-fail banks and all other banks in the US should be shut down? That's certainly A Take. I thought we wanted to do away with too-big-to-fail banks, not permanently cement them into place.

Re: Urgent: Sign the petition now

#307

Post by garry »

favflam wrote: post #242
afavour wrote: post #57

[deleted]

Also, people should pay attention when a bank is missing a Chief Risk Officer for 8 months during the most volatile period in fixed income history when Fed funds rate moved 400bps. Also, it is not a good look with SVB's CEO personally lobbied to be excluded from stress tests that more than likely would have prevented SVB from YOLO'ing on 10 yr duration MBS.

We are asking for regulation to prevent this failure from occurring again.

Re: Urgent: Sign the petition now

#308

Post by lolinder »

jlmorton wrote: post #160
axlee wrote: post #127

Earlier quoted context omitted.

There was nothing arbitrary about that choice. This bank promised better deals BECAUSE they were not careful enough about the risk it entailed. That was their competitive advantage, and they made bank for it. Well, tough luck, now it's not anymore: it has nothing to do with being a large bank or a small bank, it has to do with healthy business practices.

Sorry, I'm not sure if you're confused, but these are simple bank accounts. There was no high interest yield. The average interest yield was a fraction of a percent. No one was chasing any yield. No one was taking any risks. It's a bank account. Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks? And what about all the other regional b…

They were definitely doing high interest yield:

> ## Up to 4.50% annual percentage yield

> Help make your money last longer with our Startup Money Market Account. Like with a savings account, you’ll earn up to 4.50% APY on deposits — so you gain a longer runway. Certain restrictions apply.

https://www.svb.com/startup-banking

Re: Urgent: Sign the petition now

#309

Post by monkeywork »

Overtonwindow wrote: post #20

I don't get the sense there is a lot of sympathy from HN over this event. People lost money, payroll may be missed, that's a detrimental thing for a lot of people. If little sympathy, why?

There is a difference between having sympathy or empathy and agreeing with the idea of socializing the loss here.

I don't think many will argue that this is a "good" thing or that they are "happy" to see ppl suffer (some might but they generally are a fringe group) but agreeing that a situation sucks doesn't mean you are willing to take a bullet to fix it.

I get the sense that most people are more in the camp of: "Yeah that sucks, hope it works out for you and maybe think about the risks more next time"

Re: Urgent: Sign the petition now

#310

Post by hendzen »

garry wrote: post #144
axlee wrote: post #97

Earlier quoted context omitted.

110% agree. At some point, risk HAS to be treated as what it is, risk, rather than just "another way to do things". We have so many banks treating risk as what it is, and pricing for it, well these people decided to go to another bank to get funding, well deal with it. It's not like the average citizen has this luxury.

The equity holders and management of SVB are likely to be wiped. In the petition we specifically call this out: we are not asking for their risks to be "socialized." Depositors have a reasonable expectation that when they choose a bank (especially a publicly traded bank that is regulated) that their deposits are safe. If this is not true, then most people will only bank with the largest banks. That's not a good situa…

I would be happy to support a bailout of SVB in exchange for some reasonable concessions to American taxpayers.

1) Skin in the game - GPs of YC / a16z / Sequoia / Founders Fund / etc put in some equity in to a joint venture to acquire SVB's assets and make depositors whole. Government will backstop some portion of it.

2) YC / a16z / Sequoia / Founders Fund / etc agree to support ending the carried interest tax exemption

Post reply on HN