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SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

theintercept.com

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Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#131

Post by arrosenberg »

lettergram wrote: post #125
arrosenberg wrote: post #87

Earlier quoted context omitted.

> IMO Banks need less regulation > and have more jail time Regulations are how you get jail time.

No, laws (criminal codes) are how you get jail time. Regulations are rules passed by administrative bodies, those rarely, if ever, result in jail time. There’s a lot of reason for that, but administrative agencies often don’t have the full authority to send people to prison (I personally don’t think they should). Instead injured parties should be able to bring a suit, and I’m sure they will here.

That's nitpicking. Regulatory bodies are also created by laws. Laws that prescribe criminal penalties for bad conduct are still regulatory in nature. Most US administrative bodies refer criminal activity to the Department of Justice for prosecution. It's all part of the same apparatus.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#132

Post by PeterisP »

BurningFrog wrote: post #115

There are hard tradeoffs here, and one failed bank doesn't mean the wrong choice was made. As I remember it, the reason for weakening these regulations was that Dodd-Frank is/was extremely expensive to comply with, and that created a banking sector where only the biggest banks could survive and it made no sense to start any new banks.

That is a reasonable reason, but on the other hand, that should not justify exempting the 18th largest bank in USA (the Silicon Valley Bank; as of 2022 https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U...) from such regulation.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#133

Post by onos »

OrvalWintermute wrote: post #121
onos wrote: post #89

Earlier quoted context omitted.

Can anyone provide a link that carefully outlines this? Eg did they just recently buy a ton of ten year bonds? That would sound nuts as everyone knows rates are rising right now. Would love to see details.

It wouldn't matter even if they weren't of the same maturities, since you'd have to buy bonds with better interest rates, and you'd want the capital outflow to be spaced out. The mitigation to interest rate risk is by buying them spaced out so principal returns are being re-invested at changing rates, and you are never tied to a specific rate. https://www.investopedia.com/terms/b/bondladder.asp Here you see https://w…

Thanks that makes sense. What I was hoping to see was links to what specifically they did that was not smart. Eg did they really just buy a lot of bonds, not spacing it out?

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#134

Post by throwayyy479087 »

whitemary wrote: post #20
wpietri wrote: post #16

Earlier quoted context omitted.

Sure, but that doesn't mean that we can't fight that. Indeed, I think it means we must work ardently against it. Capitalism's pretty neat, but it has known failure modes like monopoly and corruption.

It does mean you can't fight it with little advocacy groups or well-meaning think tanks. According to history, you need a strong labor movement led by principled socialists.

That won't happen with the current "socialist" movement. Socialism is about _all workers_, including those who have "chud" opinions. This is the largest group of workers, by a lot - White working class, Southern and Midwestern dudes.

Look at the Far East and Europe - successful movements _do not_ bundle Drag Story Time and Workers Rights. Stalin was closer to Nick Fuentes than Biden. Same with Mao.

As long as the first issue that the DSA cares about is trans rights, the DSA will continue to be a joke at best and potentially controlled opposition at worst.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#135

Post by PeterisP »

themitigating wrote: post #106
aaomidi wrote: post #15

Earlier quoted context omitted.

And Biden killed the strikes. Both parties hate the non-rich. One just hates it more and is way more obvious about it.

Claiming politicans hate the vast majority of people is so insane I can't believe I'm seeing it here.

It probably is an exaggeration, and assigning emotion is futile and counterproductive; however, I think it's far less contentious to note that, however they might actually personally feel, both parties regularly vote for laws and actions that harm the vast majority of people i.e. the non-rich.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#138

Post by cmsonger »

indymike wrote: post #118
Mountain_Skies wrote: post #105

Earlier quoted context omitted.

The tech sector has made themselves one of the most hated groups in the country, behind Congress, telecom providers, and the media. Doubt they're going to find much sympathy from the folks in "flyover country" that the tech sector has gleefully been shitting all over for a decade. Perhaps the tech sector will have enough political capital to ensure they get to dump their losses on the public they loath, but it's goin…

> "flyover country" that the tech sector has gleefully been shitting all over for a decade I'm a founder of an Indiana based tech startup. What people in flyover states don't like is seeing stuff like Theranos. They also don't understand operating businesses for 10 years that lose billions. People here do not see the "tech sector" as evil: every flyover state has programs to attract and create tech sector companies.…

As a Purdue grad who spent a decade in Silicon Valley and who currently works remote for a FAANG in a state adjacent to yours: Didn't go to the coast for the big starting salary. Went for the interesting job, the flexibility to move to another job without renting a new apartment, and the career growth. Best career choice I made.

Good for you starting a tech company outside the tech meccas, it's a hard road. Remote work might help you. In an remote work world, you are on a level playing field.

As it relates to the SVB bailout. There's a strong libertarian streak in SV. While it might be entertaining to watch the hypocrisy unfold, I'm pretty certain these folks read hackernews and I'd like them to have a bit of self reflection about the role of government now that SVB has imploded.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#139

Post by zainhoda »

BurningFrog wrote: post #115

There are hard tradeoffs here, and one failed bank doesn't mean the wrong choice was made. As I remember it, the reason for weakening these regulations was that Dodd-Frank is/was extremely expensive to comply with, and that created a banking sector where only the biggest banks could survive and it made no sense to start any new banks.

I conducted Dodd-Frank Act Stress Tests for one component of a large bank. For a $400B portfolio I was able to do it with a team of 4 people including myself plus a $100k/year license to Barra and it takes about a week of the whole team’s focus.

The thing is, we were already employed by the bank to run risk management and the bank already had the subscription to the software. So from the bank’s perspective it was close to 0 marginal cost to conduct the stress tests because even if they weren’t required, we would be doing them anyway as good risk management practice.

If a bank says that stress tests are too expensive to run, that means that absent regulatory requirements they would perform no risk management.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#140

Post by coliveira »

fwungy wrote: post #120
ursuscamp wrote: post #45

The entire system is a house of cards. The collateral of the system itself is debt (USTs). There is no firm ground to stand on after decades of low interest rates. Marginal tweaks to banking regulations neither caused nor can fix this. The Fed is raising rates and we are taking our medicine.

The Fed, creates magic money from thin air then lends it to the government at interest to sell as T bills. Guess who is on the hook for the interest? The US taxpayer. The Fed is owned by its member banks which are for-profit corporations. Imagine paying interest to a third party to access your own wealth! That's the USA. There is no technical need for the Fed. We were fine without it till 1913. It just makes a lot of…

There is no technical need for any bank, at least in the way they operate now. When you get a house loan, you're not getting any money, you're transferring the property lien to the bank in exchange for cash. It is just a value exchange not a real loan, and this could be done by the government. This is true for pretty much anything a bank does nowadays, they're just exchanging one type of value for cash and getting interest on the top of this transaction that takes a few minutes to process.
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