161–170 of 889 posts
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.
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This destroys the entire economy, making startups and corporations much harder to run to the point of impossibility. Even in countries run on Sharia law, they still find proxies for interest
VCs generally fund startups by giving them funds in exchange for equity, not loans (complicated financial shenanigans aside).
VCs also use loans themselves from time to time, and their investors can use loans to invest in them.
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 don't remember a bank ever telling me this. I was taught how banks work way back in grade school. Surely everyone knows that banks don't literally hold the money you deposit in a vault somewhere.
I honestly don't see where banks are lying about this.
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It's more slow dominoes from the crypto crash, I suspect. I'm not worrying about contaigion yet, these guys aren't exactly Lehman.
Anecdotally about SVB and crypto; I really wanted to put my funding round assets into Silicon Valley Bank for my last start up. However, when I was speaking to their bankers, I mentioned that there was a possible element of the platform that would be Web3 based. The SVB team immediately paused my application and insisted that they do a deep dive into all of my investors, my bank accounts, and my pitch decks. My pitch…
Ongoing discussion here: https://news.ycombinator.com/item?id=35086336
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…
> telling two or more people they own the same dollar This is the main issue, and it's called a "reserve requirement", which is a percentage of the deposits that the bank must keep on hand to mitigate risk of issues like this. https://en.wikipedia.org/wiki/Reserve_requirement#United_Sta... In March 2020 the US Federal Reserve lowered it from 8% to 0%, which is where it is today. Just to give you an idea of how the ec…