221–230 of 311 posts
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Asking honestly - if you just got $100m wired to your account from a Series C, what's the right way to protect your cash?
There's a couple of services that will split up your deposit into 20-different banks, so that you achieve $5 Million FDIC insurance rather than just $250,000. Also, if any particular bank fails, you only risk 1/20th of your cash. EDIT: I never managed $100M before however. Maybe that stops being a potential plan at these sizes.
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Agree. SVB was not small, but an order of magnitude smaller than the large money center banks (Citi, BofA, JPMChase). That being said, nearly every other bank of that size submitted Dodd Frank Stress Test results to the Fed in 2022. https://www.federalreserve.gov/publications/files/2022-dfast... Somehow SVB avoided this. I don’t see this as systemic at all. The FDIC will make depositors whole and the owners and manag…
97% of depositors exceeded the FDIC limit.
This whole discussion around bonds makes me feel like I'm either too stupid or too smart, because it does not make sense to me that SVB would not have any sort of hedging around government bonds? I don't know much about US bonds, but Brazil issues 3 types of bonds: fixed rate, inflation-indexed floating rates and interest-indexed floating rates. It's common sense between investors you need to hold a mix of the 3 to h…
The author myopically tries to extrapolate this incident to "the economy" and "other industries". SVB's customers panicked. But who are SVB's customers. For the most part, VC, PE and non-profitable "tech" startups. Not surprising they would panic. They produce nothing themselves, conduct surveillance, sell advertising services, pay employees from funding rounds and call this a "business model". This is not "the econo…
I don’t know about you, but I come to HN for discourse that I could not get on race-to-the-bottom social media sites.
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Yes and no. LCR is basically requiring you to keep in cash and liquid assets the equivalent of a 30 day bank run. And it should work. A european bank had very large bank run last year and survived without even breaching its regulatory minimums. But that still leaves the bank in a weak position after the bank run, and you can't predict the exact magnitude of a run.
What is a "30 day" bank run? How is a bank run measured in time?
https://www.investopedia.com/terms/l/liquidity-coverage-rati...
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Taxes fund the government. Bonds are just a way to avoid managing a budget.
Na, taxes create demand for currency, which maintains the currency's value. Then you just print or borrow the currency into existence to fund the government. People are forced to acquire the currency to pay their taxes or risk being assaulted by the violence of state and dispossessed of a lot of their stuff and/or freedom.
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97% of depositors exceeded the FDIC limit.
That stinks, and I feel for them. Let's hope people will learn a lesson from this - never keep all your eggs in one basket.
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The UK government owns several banks, one of these banks is for exactly this purpose. National Savings & Investment Bank (NS&I) does not offer loans, but money you save with this bank is in practice just part of the country's general fund, they're paying you interest on your savings because if they borrowed that money commercially they'd have to pay interest too. This has one obvious big advantage for the saver - it'…
Three modest notes about premium bonds. Firstly, you can cash in bonds at any time, so it's effectively an instant access account. Secondly, the current rate is 3.30%. Thirdly, the payouts are tax-free. 3.30% on an instant access account is actually pretty great (best i see elsewhere is 2.51%; i see a six month fixed term deposit at 3.28%), and getting it tax-free without having to have it in an ISA makes it even bet…
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That stinks, and I feel for them. Let's hope people will learn a lesson from this - never keep all your eggs in one basket.
Aren't we talking about hundreds of millions/billions of dollars? At that scale, not a lot of baskets available.
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Aren't we talking about hundreds of millions/billions of dollars? At that scale, not a lot of baskets available.
Could a tech company have split their accounts into separate $250k accounts? I'm not sure if the bank would offer that.
Fun fact, if you're married, you can actually turn that into 3 * FDIC insurance limit.
- Account 1: You
- Account 2: Your spouse
- Account 3: Jointly you and your spouse