Weaken regulations, trains and banks crash, but hey small government, slash the red tape.
[flagged]
SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
181–190 of 201 posts
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#182There 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 clo…
Where did anyone say it was a stress test that was expensive? They literally said “complying with” not “ensuring you’re compliant with”
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#183Earlier quoted context omitted.
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 clo…
Where did anyone say it was a stress test that was expensive? They literally said “complying with” not “ensuring you’re compliant with”
Would you be so kind as to explain the difference in this case and what would make one more expensive than the other?
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#184Earlier quoted context omitted.
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 clo…
Doing the stress tests isn't where the cost would be coming from; the issue is more about the distraction of making sure that compliance is in place. I'd draw an analogy to having breakfast. If we legally required people to have breakfast every day, that would actually be quite expensive. It'd go from a reflex to something that has to be considered, we have to spend a little bit of time creating evidence that we had…
The issue is that you think making sure compliance being in place is a "distraction". This is like devs saying writing test classes is a "distraction", or having an infosec team is a "distraction", or having seatbelts in cars is a "distraction".
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#185Earlier quoted context omitted.
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 clo…
>absent regulatory requirements they would perform no risk management. did SVB do any risk management either?
They didn't have a Chief Risk Officer for 9 months, just hired one in January.
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#186Earlier quoted context omitted.
I always see people say the national debt doesn’t matter because it isn’t like household debt. However, I just fail to see how that is true. At some point the can won’t be able to be kicked down the road anymore. I guess everyone is hoping that it won’t be during their lifetime.
Because fundamentally the US government can print money to pay US debt. You can't print money to pay off your household debt. It's a different beast altogether subject to entirely different rules and incentives than household debt.
Printing money results in inflation. That was my original point.
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#187Earlier 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…
No. Foxnews made the tech sector the most hated groups.
yeah, had nothing to do with crypto.
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#188Earlier quoted context omitted.
> If a bank says that stress tests are too expensive to run, that means that absent regulatory requirements they would perform no risk management. This feels so damn true about almost every megacorp belly-aching about regulation.
Just chiming in as a lawyer who works for a fairly big corporation. You're imagining a scenario where one set of clearly written and fairly interpreted rules applies to your core business. You're excluding scenarios where there are fifty states and two hundred countries wildly swinging back and forth from idiotic legislation drafted to apply to three companies (Google, Facebook, Amazon) that is impossible to apply to…
Sounds like running a multinational corporation has some overhead.
The idea that we shouldn't regulated because it's too hard, is the same rationale for suppressing wages, costs money.
For a corporation, too hard === costs money.
No corporation is entitled to exist.
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#189Earlier quoted context omitted.
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 clo…
Doing the stress tests isn't where the cost would be coming from; the issue is more about the distraction of making sure that compliance is in place. I'd draw an analogy to having breakfast. If we legally required people to have breakfast every day, that would actually be quite expensive. It'd go from a reflex to something that has to be considered, we have to spend a little bit of time creating evidence that we had…
Any analogy comparing requirements for a corporation with a human being is always going to sound ridiculous because you are comparing a legal entity with a person.
A government is formed by people, not corporations.
Corporations exist inside of a space governments specifically carve out for them.
The mantra that corporations are people is political ideology.
Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC
#190Earlier quoted context omitted.
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.
It's not a nitpick. We have a two-tier justice system and regulatory bodies mostly live in the tier that issues fines but doesn't send anyone to prison, and this is not coincidence.
It's not a coincidence because the Department of Justice prosecutes the criminal offenses.