Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The collapse of SVB exposes the largest crack in the economy

brooock.com

Post reply on HN
Print view View original

291–300 of 311 posts

Re: The collapse of SVB exposes the largest crack in the economy

#291

Post by astrange »

gdy wrote: post #285
Scoundreller wrote: post #258

Earlier quoted context omitted.

System-wide Innovation is a lot easier when one’s country has a handful of banks. USA has ~4500 banks, 12x the #2 country, Russia. https://www.helgilibrary.com/charts/what-country-has-the-mos...

In Russia money transfers are mostly instant. What stops american banks from using new software and new payment protocols?

There are instant transfers (Zelle, wire transfers, debit cards). There aren't instant transfers with all the same properties as ACH, but later this year there will be.

Re: The collapse of SVB exposes the largest crack in the economy

#292

Post by astrange »

monodeldiablo wrote: post #249
astrange wrote: post #147

Earlier quoted context omitted.

We have chip-and-nothing, or contactless, which is better than Chip-and-PIN. (Note Apple Pay and similar are basically chip-and-PIN because it's authenticated by the phone passcode.) > And who still uses cheques these days?! US uses them for business-to-customer payments, especially unsolicited ones, because we don't want to give random businesses we don't know our bank account numbers.

Those numbers at the bottom of a cheque? Yeah, they include your account number. There's no inherent information risk to giving out an account number that justifies an outdated paper-based system. Especially when one considers the accompanying fraud risk thereof. The instant I moved to Europe, I realized just how far behind consumer banking is in the US. It's pitiful.

No, when someone sends you a check it has their account number on it, not yours…

Re: The collapse of SVB exposes the largest crack in the economy

#293

Post by astrange »

FireBeyond wrote: post #183
astrange wrote: post #114

Earlier quoted context omitted.

Same-day ACH, aka why you now get paid two days earlier than you used to. Check deposits by smartphone camera. Most of the stuff on https://www.bitsaboutmoney.com .

LOL. In Australia, an inter-bank ACH transfer was typically complete within the hour, worst case. Usually within minutes. Without fees. In 2002.

And how good was your internet?

Re: The collapse of SVB exposes the largest crack in the economy

#294

Post by cplusplusfellow »

JohnFen wrote: post #119
drstewart wrote: post #91

Earlier quoted context omitted.

Funny that in threads about crypto companies failing everyone cries about "this is why we have regulations and safety valves in the financial industry!" but now when these are in force people cry about the safety valves and regulations existing, and how the companies should just be allowed to fail

Who's doing that? Part of the issue here is that SVB was able to get into trouble because important regulations and safeguards were removed years ago. The ones that exist to minimize the wider impact of a bank failure are working, and I don't see anyone upset about that fact.

They bought treasuries and triple A rated mortgages. what else do you expect a bank to do to when seeking yield?

They aren’t just a vault for your money - they would charge you handsomely if so.

Re: The collapse of SVB exposes the largest crack in the economy

#295

Post by cplusplusfellow »

rufus_foreman wrote: post #163
cplusplusfellow wrote: post #12

Earlier quoted context omitted.

Self inflicted wounds this time, though. There is nothing wrong with a bank purchasing 80bln of MBS with their depositors money. The issue becomes when the fed suddenly raises rates faster than any time in their history while still failing to fight inflation (which is a result of having a stronger economy).

> The issue becomes when the fed suddenly raises rates faster than any time in their history The Fed funds rate was 9% in July of 1980 and 19% in December of 1980.

So, roughly doubling (2.1x) in absolute terms versus 17x over the past year.

Re: The collapse of SVB exposes the largest crack in the economy

#296

Post by rufus_foreman »

cplusplusfellow wrote: post #295
rufus_foreman wrote: post #163

Earlier quoted context omitted.

> The issue becomes when the fed suddenly raises rates faster than any time in their history The Fed funds rate was 9% in July of 1980 and 19% in December of 1980.

So, roughly doubling (2.1x) in absolute terms versus 17x over the past year.

Let me get this straight. You're making the argument that raising interest rates from 0.01% to 0.17% in a year would have a similar effect as raising interest rates from 5.9% to 100% in a year?

You would say the Fed raised rates as quickly in the first scenario as the second?

Re: The collapse of SVB exposes the largest crack in the economy

#297

Post by hyperman1 »

mullingitover wrote: post #153
astrange wrote: post #114

Earlier quoted context omitted.

Same-day ACH, aka why you now get paid two days earlier than you used to. Check deposits by smartphone camera. Most of the stuff on https://www.bitsaboutmoney.com .

Are these really innovations, or just convoluted workarounds for problems that other countries have actually solved? I don't think anyone under 40 in Europe has ever written a check, for example, because wires are far more convenient there.

Agree. This 40 year old european has seen/used exactly 1 cheque in his life, to buy the house. For some complicated legal reason, houses can not be bought with normal means of payment. We had to walk with the flimsy piece of paper from the bank to the notary, where a bank representative was actually sitting. We gave it to the notary, the notary gave it to the previous owner, and they had to walk it back to their bank. We both felt like stone age caveman, except the previous owners already did it once in the 1980's when they bought the house, so it was the 2nd cheque they saw in their lives.

We asked the banker what would happen if we were robbed. He said he'd just write a new one. The thief couldn't do anything with it, as it was all on name only, and the extremely low daily volume of cheques in use would mean cashing it would stand out like a sore thumb.

Re: The collapse of SVB exposes the largest crack in the economy

#298

Post by worik »

boeingUH60 wrote: post #166
worik wrote: post #75

Earlier quoted context omitted.

Yes An alternative is to bankrupt the partners, cancel the shares, then take action for depositors That is what did not happen in 2008

This is exactly what's happening here. Equity investors have lost their shirts. The government protection is only for depositors.

I hope so. But we have not seen that yet.

Have the shares been canceled? Are the partners bankrupted?

Too soon to tell. Remember AIG

Re: The collapse of SVB exposes the largest crack in the economy

#299

Post by Longtermvalue1 »

MrBuddyCasino wrote: post #259
TooSmugToFail wrote: post #2

SVB used an exemption from Basel III, which allowed it to run a riskier business, and eventually led to its implosion. Basel III was introduced to force banks to be more conservative, and thus more safe. Downside: this also means bank is going to be less profitable. European banks were forced to implement Basel III, while the US bankers managed to lobby a loophole for certain types of banks. And sure enough, SVB leve…

This btw is Jay Ersapah, Head of Financial Risk at SVB. Apparently DEI & LGBTQ issues were more important than making sure their assets & obligations are balanced: https://twitter.com/the_real_fly/status/1634035956188688385

It’s reported that SVB paid executives bonuses to grab cash right before they were shit down. Each of these executives names should be published & exposed as the grifters they are.

Re: The collapse of SVB exposes the largest crack in the economy

#300

Post by phone8675309 »

otikik wrote: post #247
phone8675309 wrote: post #222

Earlier quoted context omitted.

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.

What about this other lesson: bankers need to be punished harder.

We don't punish bankers in this country.
Post reply on HN