Urgent: Sign the petition now • Hacker News Board

Re: Urgent: Sign the petition now

#381

Post by throw9872349872 » Sun, Mar 12, 2023, 12:21 AM UTC

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…

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Re: Urgent: Sign the petition now

#382

Post by IncRnd » Sun, Mar 12, 2023, 12:21 AM UTC

AlchemistCamp wrote: post #229

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…

So SVB owners should take losses. Not those who had bank accounts there and literally did nothing wrong to cause this or even contribute to it.

It was just yesterday that there were pages of comments here on HN filled with people talking about how there should be no bank reserves. The arguments were that cash flow is king and reserves are bad for the economy.

Re: Urgent: Sign the petition now

#383

Post by scarface74 » Sun, Mar 12, 2023, 12:21 AM UTC

briHass wrote: post #223

garry wrote: post #144

Earlier quoted context omitted.

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…

Just to clarify, these depositors specifically exceeded the FDIC deposit insurance limit (250K), right? That isn't a new or unknown rule; either through ignorance or calculated risk, those depositors that exceeded the limit took a chance. I don't disagree that something should be done in the future to prevent this, but when you gamble, sometime you lose.

Were they gambling by putting their money in an FDIC insured bank?

How do you even run a payroll system if your money is spread out between a dozen banks?

Re: Urgent: Sign the petition now

#384

Post by Mystery-Machine » Sun, Mar 12, 2023, 12:22 AM UTC

lolinder wrote: post #331

WhatTheFlak wrote: post #303

Earlier quoted context omitted.

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…

> everyone has to sit down and evaluate their banks balance sheet before trying to do business with them? No, if you're not keeping more than $250k in the account, you don't have to do the homework. If you're keeping more than $250k in the account, you can afford to pay someone $1k to do a bit of due diligence.

$250k is nothing for a company. It's 1 engineer salary. And, no, it's not $1k. It's more like $10k-$20k per month, plus all the overhead of having your money in multiple bank accounts and shuffling it all around just to never hit the $250k limit.

Just my 2 cents on this strawman part of discussion.

Re: Urgent: Sign the petition now

#385

Post by cgh » Sun, Mar 12, 2023, 12:22 AM UTC

doh wrote: post #117

School-Cotton wrote: post #63

Earlier quoted context omitted.

Source for SVB lobbying against banking regulations?

“In 2015, SVB President Greg Becker submitted a statement [0] to a Senate panel pushing legislators to exempt more banks – including his own – from new regulations passed in the wake of the 2008 financial crisis.” [0] https://www.govinfo.gov/content/pkg/CHRG-114shrg94375/pdf/CH...

Oof, this is real shot/chaser stuff. For anyone interested, the relevant statement starts on page 115 of the linked document. It’s quite short and worth reading. Some real Big Short vibes here.

Re: Urgent: Sign the petition now

#386

Post by nightmarish » Sun, Mar 12, 2023, 12:22 AM UTC

School-Cotton wrote: post #126

garry wrote: post #101

Earlier quoted context omitted.

FWIW I've never had that perspective, so I'm not sure why you are saying that.

Most commenters have a very low-dimensional understanding of politics, and assume if you’re a businessman or capitalist, all failings of Republicans can be attributed to you personally.

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Re: Urgent: Sign the petition now

#387

Post by stephen_g » Sun, Mar 12, 2023, 12:22 AM UTC

garry wrote: post #167

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.

Many startups chose SVB because they were the ones willing to open a bank account for them at all. I remember going to a branch of Bank of America to open a bank account for Posterous and not being able to.

Why? Is that normal in the US? Credit is a different thing (did you need a big overdraft facility?), but here in Australia I can’t imagine that a bank would refuse to open transaction or savings accounts for a legal business… The main exception is a few banks are stopping directly offering products to fossil fuel companies and the like, but that’s it.

Re: Urgent: Sign the petition now

#388

Post by ec109685 » Sun, Mar 12, 2023, 12:22 AM UTC

blagie wrote: post #92

I'm 100% in support of a bailout... ...with the federal government taking equity in return, at the last valuation, diluting existing owners. That would let the businesses keep running, without the "privatize gain / socialize loss" merry-go-around.

They are upside down, so there isn’t anything to take.

Re: Urgent: Sign the petition now

#389

Post by fsckboy » Sun, Mar 12, 2023, 12:22 AM UTC

burlesona wrote: post #132

I mean YC and all the VCs killed SVB by causing a run on the bank. This is not the only business that VCs have harmed by spreading FUD (in many cases unfounded or even fabricated with dubious motives), and then acting as a herd. I have tremendous sympathy for the many small startups who had nothing to do with this, but a lot less for the VCs in this case. SVB was well capitalized and while there could be losses here…

upvoted because you're raising an important issue, but not personally sure whether you're going too far; maybe you have more info than I.

SVB's customers did start/maintain a run on the bank which caused the bank failure, so when SVB's customers are asking to be made whole beyond the well known and generous FDIC limits, it's a little sus.

Re: Urgent: Sign the petition now

#390

Post by dehrmann » Sun, Mar 12, 2023, 12:22 AM UTC

leipert wrote: post #98

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?

I know that 250k cash is not a lot for a company with a few folks on payroll. But why wouldn’t you distribute cash across multiple banks as a business? It hasn’t to be this situation, but if your accounts are flagged for fraud or someone hacks an account, aren’t you safer by distributing cash in multiple banks?

This workaround seems rather silly when it mostly applies to medium-sized businesses trying to get safe, stable bank accounts. FDIC coverage is too low for businesses.