21–30 of 93 posts
Earlier quoted context omitted.
Why are you still banking with them?
Honestly I just thought that was the way banking was done. I don't send a lot of wires (and everybody else I have dealt with were even worse).
My bank (in Canada) has limits on how much I can withdraw per day, per week, per month. Furthermore, there could be a delay of up to 5 business days before I can get the money to its destination. And that’s for money in the thousands only. How is that money in the billions can be withdrawn so quickly esp. since these were high value accounts each in the millions/billions? Couldn’t they just use one of their terms or…
I doubt those limits would apply to business accounts, which I'd guess were the majority of the withdrawals here. Are you sure the limits on your account would apply to e.g. a wire transaction? Of course there are limits on ATM withdrawals and some other transfer methods, but I'm not sure they'd apply if you wanted to send a wire.
Not many people (at least, people who don't deal with large sums) have experience with doing a wire transfer. Sometimes they're a bitch to deal with - but it's what you'd use if you are doing very large sums (like, in the order of 6 or 7 figures or more).
I don't know if "the experts" all agree with "this expert" but he pointed out that in buying all the mortgage backed securities, SVB got to put them in a "hold to maturity" account that is not "marked to market" (the value in the account does not match their decreased market value, so on the books it looks like a lot of value in there, but in reality it's not)
at the same time, as the coupons on these bonds pay out and the bank collects them, that money just shows up on the bank's income statement, not landing in the hold to maturity account itself as part of the value of the asset. This rings all the "hey, look we are profitable" and "hey don't I get a bonus" bells, twisting incentives for the bank and its officers (and other banks) to keep do this, lather rinse repeat.
recipe for disaster when interest rates go up.
Earlier quoted context omitted.
The bank will happily tell you that wire transfers have no limits or delays.
Yes my bank says that, but as soon as I actually do it they suddenly have to "do KYC" aka hold it up for days and give me lots of bullshit reasons why an already thoroughly KYC'd account needs to wait for a wire because reasons. Meanwhile not only can you not access the money in either of your accounts, the bank is drawing sweet sweet overnight IORB interest on it.
My bank (in Canada) has limits on how much I can withdraw per day, per week, per month. Furthermore, there could be a delay of up to 5 business days before I can get the money to its destination. And that’s for money in the thousands only. How is that money in the billions can be withdrawn so quickly esp. since these were high value accounts each in the millions/billions? Couldn’t they just use one of their terms or…
This does not reflect the reality of business bank accounts in Canada. When you have treasury access you can wire as much money as you want practically instantly just like with SVB. I bank with one of the big 5. Nothing is stopping you from going into your bank and wiring money away it's just cash that they don't want to give out without multi-day delays.
there was an interesting interview on Kudlow the other day (which I guess was a WSJ piece also? https://www.youtube.com/watch?v=D2OELV5vVZU ) about "how it happened" at SVB. I don't know if "the experts" all agree with "this expert" but he pointed out that in buying all the mortgage backed securities, SVB got to put them in a "hold to maturity" account that is not "marked to market" (the value in the account does not…
If the accounting auditors are doing their job then the bank managers don't get to cook the books. The accounting rules are set by the accounting industry. If the financial statements don't reflect what's happening, it's the accountants fault. So, it's incorrect to imply that bankers are doing something nefarious. At this point no one has suggested an Enron or FTX type scandal.
What's more likely is just the incompetence with liquidity management, incompetence with the crisis handling.
there was an interesting interview on Kudlow the other day (which I guess was a WSJ piece also? https://www.youtube.com/watch?v=D2OELV5vVZU ) about "how it happened" at SVB. I don't know if "the experts" all agree with "this expert" but he pointed out that in buying all the mortgage backed securities, SVB got to put them in a "hold to maturity" account that is not "marked to market" (the value in the account does not…
They're conflating 2 issues. The first issue is liquidity management. The second is accounting. If the accounting auditors are doing their job then the bank managers don't get to cook the books. The accounting rules are set by the accounting industry. If the financial statements don't reflect what's happening, it's the accountants fault. So, it's incorrect to imply that bankers are doing something nefarious. At this…
no, what's more likely (if what has been said between the two of us comports with reality) is that the incentives for the officers of the bank are in conflict with the healthy management of the bank.
Bankers running a bank into the ground cannot be blamed on regulators or the accounting profession which only "review" what has happened, they never have their fingers on the levers (although additional accounting and banking regulations may be required to avoid this type of problem in the future)
My bank (in Canada) has limits on how much I can withdraw per day, per week, per month. Furthermore, there could be a delay of up to 5 business days before I can get the money to its destination. And that’s for money in the thousands only. How is that money in the billions can be withdrawn so quickly esp. since these were high value accounts each in the millions/billions? Couldn’t they just use one of their terms or…
Also, it's not a cash withdrawal. We just wired the money to other accounts. Cash would require tons of paperwork.
My bank (in Canada) has limits on how much I can withdraw per day, per week, per month. Furthermore, there could be a delay of up to 5 business days before I can get the money to its destination. And that’s for money in the thousands only. How is that money in the billions can be withdrawn so quickly esp. since these were high value accounts each in the millions/billions? Couldn’t they just use one of their terms or…
No business is going to park their working capital with a bank that has those requirements.
sure, customers will periodically get mad and take their business elsewhere, but it's a fever dream to think that elsewhere is any different.