Bank run on Silicon Valley Bank

Post by danielmarkbruce » Thu, Mar 09, 2023, 10:41 PM UTC

anon291 wrote: post #19

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.

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?

Post by FormerBandmate » Thu, Mar 09, 2023, 10:43 PM UTC

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.

Post by [deleted] » Thu, Mar 09, 2023, 10:43 PM UTC

tempsy wrote: post #172

cjensen wrote: post #26

Earlier quoted context omitted.

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.

You’re kidding right? There’s a limit of like $250k An individual could easily have that much let alone a startup with millions.

Post by JohnFen » Thu, Mar 09, 2023, 10:45 PM UTC

recursivedoubts wrote: post #43

ianferrel wrote: post #28

Earlier quoted context omitted.

Does that provide a better outcome for society than something like FDIC deposit insurance and the occasional run? Seems like for the vast majority of people it does not. Most banks make enough money to pay their FDIC premiums and some interest on demand accounts and profit for their shareholders, and the few that don't are covered by insurance. That seems way better than having to pay a monthly fee to keep my money s…

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…

Post by bink » Thu, Mar 09, 2023, 10:45 PM UTC

mmastrac wrote: post #168

SVB was historically such a weird bank - it was the most "famous" tech bank, perhaps solely because of its name - but yet it was so utterly behind in the technology it used for _years_.