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SVB customers who lost their deposits remain on the hook for loans

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Re: SVB customers who lost their deposits remain on the hook for loans

#51

Post by DelaneyM »

mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”.

Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account.

The reason most foreign investors use Caymanian intermediaries is actually just that transparency, particularly when they’re being scrutinized by foreign regulatory bodies and don’t want their money to disappear into a Delaware numbered company.

It is very, very hard to use Cayman to hide money from taxes. It is, however, a particularly easy place to keep global funds in a law abiding and transparent way. This is our whole regulatory strategy for continued national growth and prosperity.

I don’t challenge your conclusion that FDIC protection shouldn’t apply to non-regulated funds. Just don’t trash Cayman. If your country allows tax shenanigans that’s on your government and has nothing to do with us. Cayman will not aid or abet any tax evasion, and does not deserve the snide aside.

Re: SVB customers who lost their deposits remain on the hook for loans

#52

Post by krsrhe »

epgui wrote: post #30
hanniabu wrote: post #18

Earlier quoted context omitted.

Why can't people sell the bank's debt to them?

They probably could, but who would “buy” a liability? If someone wanted to sell you their problems, how much money would you pay for the privilege of the burden?

[dead]

Re: SVB customers who lost their deposits remain on the hook for loans

#53

Post by sokoloff »

toast0 wrote: post #31
Simulacra wrote: post #4

Is it normal for loans to be wiped clean in a bank failure?

No, but it's not unsual to be able to offset deposits and loans. If you owe me $X and I owe you $Y, and you won't give me my $X back, why should I pay more than $Y - $X on the loan? Edit: see this from the FDIC, which suggests this would be an option for depositors https://www.fdic.gov/consumers/banking/facts/borrowers.html

The first thing I’d think to do is write a check to cover the loan drawn on my SVB deposit. Let them explain why they bounced that check and we can take it to court.

Re: SVB customers who lost their deposits remain on the hook for loans

#54

Post by yieldcrv »

jmyeet wrote: post #44
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

100% this. Here's the lesson I want people to take away from this: only when the government gives money to ordinary people is it somehow a moral hazard. The wealthy will never say no to government money. Worse, they will expect it and lobby for it. It's why student loan forgiveness is somehow a moral hazard but forgiving PPP loans isn't. So here you have a bunch of rich people who wanted to avoid paying any US taxes…

thats not what happened its actually a bad take due to the inaccuracies it relies upon, I wrote the other view in a sister comment

Re: SVB customers who lost their deposits remain on the hook for loans

#55

Post by usefulcat »

hanniabu wrote: post #18
papercrane wrote: post #9

Earlier quoted context omitted.

Loans are an asset on the banks balance sheet and can be sold like any other asset.

Why can't people sell the bank's debt to them?

Who says they can’t? I can’t find it just now, but I recall reading an article about some firm that approached a number of SVB depositors offering to buy the rights to their deposits at a discount (probably a steep discount at that). This was on or about that Friday or Saturday, before the government announced they would cover more than the FDIC limit.

Re: SVB customers who lost their deposits remain on the hook for loans

#56

Post by [deleted] »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

[deleted]

Re: SVB customers who lost their deposits remain on the hook for loans

#57

Post by paulddraper »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

I don't know what to tell you; the Cayman Islands for years has been ranked top of the list of tax havens and money laundering locations for years and years.

Those are just facts.

https://www.republicworld.com/world-news/rest-of-the-world-n...

Re: SVB customers who lost their deposits remain on the hook for loans

#58

Post by PragmaticPulp »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

> The reason most foreign investors use Caymanian intermediaries is actually just that transparency, particularly when they’re being scrutinized by foreign regulatory bodies and don’t want their money to disappear into a Delaware numbered company.

> It is, however, a particularly easy place to keep global funds in a law abiding and transparent way.

I don’t doubt that Cayman is strict for individuals like yourself opening bank accounts, but the regulations on companies are a different story. It’s a well-known tax haven on the global scene.

Re: SVB customers who lost their deposits remain on the hook for loans

#59

Post by stefan_ »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

Outcomes matter.

Re: SVB customers who lost their deposits remain on the hook for loans

#60

Post by greenthrow »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

This is some top tier gaslighting, man. You know as well as I do that people put money in the Cayman islands to dodge taxes. You're behaving like someone at the Cheesecake Factory being offended when someone says their food is high calorie.
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