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Bank run on Silicon Valley Bank

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Re: Bank run on Silicon Valley Bank

#111

Post by darkerside »

acchow wrote: post #92
darkerside wrote: post #68

Earlier quoted context omitted.

[flagged]

I've flagged this. Please read the HN rules "Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes. Please don't fulminate. Please don't sneer, including at the rest of the community. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive." https://news.ycombinator.com/newsguidelines.html

The comment I responded to advocates for a world where this forum would never have existed. I could have been less snarky, but I am genuinely mystified how someone could have posted such a thoughtless and unsubstantiated comment and seemingly not even realized it.

Re: Bank run on Silicon Valley Bank

#112

Post by volkk »

ticviking wrote: post #93
chollida1 wrote: post #82

Earlier quoted context omitted.

I assume you are trolling, but in case you are not. How would you provide loans to help get businesses started? How would you provide loans to people to buy their first homes? How would you provide loans so people can afford to go to school? How would you provide loans to buy a vehicle so people can get to/from their job before they get a paycheck? How would farmers afford to buy land, equipment and plant crops befor…

Savings. Frugality. Only consuming what we can actually afford. Investment with real skin in the game. If you have to take on much higher risk to get returns we will find ourselves being more careful about those returns actually happening.

so...it would take actual generations for people to get out of being utterly broke since in your world, you'd have to save up as a poor person to actually open up a business or do anything worthwhile. sounds so fun, sign me up. i want my family to be poor for 250 years until we finally have 2 million that we need to start that farm my great great great grandfather wanted to.

some people on this website literally live on a different planet or don't actually have any understanding of...anything and just say things because it sounds smart

Re: Bank run on Silicon Valley Bank

#113

Post by toast0 »

cjensen wrote: post #26
anon291 wrote: post #19

Earlier quoted context omitted.

Perhaps I'm overly skeptical, but everyone should know that all banks have the risk of 'if everyone takes their money out, the bank won't be able to make it work', right?

If the Bank is federally insured, it's not a problem that the bank won't be able to make it work. That's why generally speaking bank runs only happen on uninsured banks in the US. SVB is not, as far as I can see, insured and should definitely be careful in their choice of words.

They've got an FDIC page, https://www.svb.com/fdic, and they show up in the FDIC bank finder https://banks.data.fdic.gov/bankfind-suite/bankfind/details/...

Although the Assets, Liabilities, and Capital reporting available if you click "create financial reports for this institution" estimates 5.69% of deposits are insured. Is a corporate account limited to $250K of deposit insurance? If so, I imagine many of them may have much more than that, and the reporting does show almost 75% of the deposits are in accounts with greater than $250K, assuming I'm reading the report correctly.

Re: Bank run on Silicon Valley Bank

#114

Post by recursivedoubts »

chollida1 wrote: post #73
recursivedoubts wrote: post #43

Earlier quoted context omitted.

Yes, it does. Lying is wrong[1]. Therefore, it is bad to base your banking system on it. It's the typical thing where the costs to the system accrete over time and then cause a crisis: the elites are bailed out, the taxpayers eat it. There wouldn't need to be a reserve ratio. A dollar could, in theory, be lent out an infinite number of times, so long as that dollar were lent (and saved) at increasingly shorter durati…

Who is lying in this case? Banks are one, if not the most, regulated companies in the US. What are banks lying about and who are they lying to? I'd assume the government would come down on them pretty hard if it turns out that all banks are lying to their customers as federal and state regulations on banks are pretty heavy handed to make sure that the vast majority of banks are healthy at any given time.

The bank is telling two or more people they own (or, at least, have access to) the same dollar at the same point in time.

With duration matching you can have loans, but it is clear that depositor A can't get dollar X back until time point T, and that borrower B can have the dollar until then.

Re: Bank run on Silicon Valley Bank

#115

Post by recursivedoubts »

avianlyric wrote: post #94
recursivedoubts wrote: post #43

Earlier quoted context omitted.

Yes, it does. Lying is wrong[1]. Therefore, it is bad to base your banking system on it. It's the typical thing where the costs to the system accrete over time and then cause a crisis: the elites are bailed out, the taxpayers eat it. There wouldn't need to be a reserve ratio. A dollar could, in theory, be lent out an infinite number of times, so long as that dollar were lent (and saved) at increasingly shorter durati…

> Lying is wrong What explicitly is the lie?

See my sibling comment.

Re: Bank run on Silicon Valley Bank

#116

Post by boringg »

rippercushions wrote: post #15

From https://techcrunch.com/2023/03/09/silicon-valley-banks-share... : Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.” Pro tip: if you're CEO of a bank that's facing a bank run, don't tell the press that you'll be in trouble if everybody takes their money out.

Poor move by the CEO. It's like he wanted to be honest with everyone but that wasn't a strong signal.

Also out most of the banks - you would expect that the clients of SVB are a little more sophisticated than your retail bank demographic being start-up companies and all (big assumption).

Re: Bank run on Silicon Valley Bank

#117

Post by silisili »

cjensen wrote: post #26
anon291 wrote: post #19

Earlier quoted context omitted.

Perhaps I'm overly skeptical, but everyone should know that all banks have the risk of 'if everyone takes their money out, the bank won't be able to make it work', right?

If the Bank is federally insured, it's not a problem that the bank won't be able to make it work. That's why generally speaking bank runs only happen on uninsured banks in the US. SVB is not, as far as I can see, insured and should definitely be careful in their choice of words.

How do you mean? SVB is FDIC insured - https://banks.data.fdic.gov/bankfind-suite/bankfind/details/...

Re: Bank run on Silicon Valley Bank

#118

Post by [deleted] »

cjensen wrote: post #26
anon291 wrote: post #19

Earlier quoted context omitted.

Perhaps I'm overly skeptical, but everyone should know that all banks have the risk of 'if everyone takes their money out, the bank won't be able to make it work', right?

If the Bank is federally insured, it's not a problem that the bank won't be able to make it work. That's why generally speaking bank runs only happen on uninsured banks in the US. SVB is not, as far as I can see, insured and should definitely be careful in their choice of words.

[deleted]

Re: Bank run on Silicon Valley Bank

#119

Post by pclmulqdq »

krasin wrote: post #5
dgrin91 wrote: post #3

First silvergate, now SVB. Is this going to be a wave across the banks?

Today, Credit Suisse delayed its 2022 report after the last minute call from SEC: https://www.cnbc.com/2023/03/09/credit-suisse-to-delay-its-2... I don't know what to make of it.

It could be routine (no more news from banks that are in trouble please), but the SEC does have access to the numbers in the filing since it goes into EDGAR about a month before the announcement.

Re: Bank run on Silicon Valley Bank

#120

Post by boringg »

recursivedoubts wrote: post #21

Daily reminder that bank runs wouldn't be a thing if we did duration matching, forbidding banks from borrowing short and lending long. As always, the underlying problem in banking is that the banks are lying, telling two or more people they own the same dollar at the same point in time. If they locked deposits for a period of time they could safely (and morally) loan that money out without lying, and, in fact, there…

I mean if they locked deposits for a time period - why wouldn't you just got buy a bond? The service is the liquidity.

You are trying to solve a relatively non-existent problem.

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