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SVB chief pressed lawmakers to weaken bank risk regulations

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Re: SVB chief pressed lawmakers to weaken bank risk regulations

#41

Post by mrkurt »

capableweb wrote: post #34
nibbleshifter wrote: post #23

Earlier quoted context omitted.

> Also, SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world Not anymore!

Even if you end up getting back "only" 250K USD, you end up being in the 1% of the world when it comes to wealth. That sort of cash is really not "normal" or "common" to have in a bank account, in the world at large. Looks differently in concentrated high-wealth areas like Silicon Valley of course, but still plenty of wealth compared to the rest of the world.

That's an incredibly normal amount for a business. That's one payroll cycle for ~50 people making $75k per year each.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#42

Post by [deleted] »

somsak2 wrote: post #18
bratao wrote: post #8

I want to have sympathy for the depositors, but it is hard to knowing that they chose to keep their funds in an bank that was actively lobbying to weaken risk regulations. There multiple products that would help in this situation, such as insurances and virtual accounts that split between multiple FDIC accounts/banks. Bailing out these depositors would send the wrong message and encourage moral hazard, i.e., the beli…

> it is hard to knowing that they chose to keep their funds in an bank that was actively lobbying to weaken risk regulations what an insane standard. as a customer of any company I'm now supposed to investigate their lobbying activity? what else do I need to do due diligence on?

[deleted]

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#43

Post by mrkurt »

MrMan wrote: post #38
mrkurt wrote: post #32

Earlier quoted context omitted.

There's no bailout. SVB is dead. People are pushing for depositors to get their money back. Which is, I think, reasonable. Putting your company money in a bank account should be safe. We should regulate banks like SVB to make it more safe. We should also make sure when the regulations fail the people who use a bank, they can continue doing business.

depositors are only entitled to what is left over after resolution of the assets, nothing more! dont make this situation worse by advocating for something unethical and which is bad for the entire system

Why does FDIC insurance exist at all?

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#44

Post by MrMan »

mistrial9 wrote: post #2

with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto. IMO - almost all the leveraged finance in the last 20 years is already over-the-top and mostly "fake money".. who gets the axe first is politics. Supporting statement to this heresy? When the "real economy" tanked due to covid-19 lockdown, the pape…

SVB was an incompetently run bank whose major business model relied on outright cronyism. they deserve everything they get.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#45

Post by lp0_on_fire »

mrkurt wrote: post #32
lp0_on_fire wrote: post #20

Earlier quoted context omitted.

> Also, SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world. They are going to leverage their power and influence to recover as much as they can as quickly as they can. All the more reason regular people need to be screaming to high heaven that those rich and powerful people will get eaten if they push for and eventually receive a b…

There's no bailout. SVB is dead. People are pushing for depositors to get their money back. Which is, I think, reasonable. Putting your company money in a bank account should be safe. We should regulate banks like SVB to make it more safe. We should also make sure when the regulations fail the people who use a bank, they can continue doing business.

Every bank account in the United States is insured up to $250,000 by the FDIC. I have zero sympathy for these depositors who decided it would be "too costly" or "too much hassle" to split their deposits into multiple accounts.

If you've got $25,000,000 dollars at SVB, you need 100 accounts. This is not rocket science. I really hope that they find a buyer to make depositors whole but if one cannot be found why should the public reimburse depositors for more than 250K simply because they were too cheap to hire a couple of accountants to manage it?

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#46

Post by boeingUH60 »

MrMan wrote: post #38
mrkurt wrote: post #32

Earlier quoted context omitted.

There's no bailout. SVB is dead. People are pushing for depositors to get their money back. Which is, I think, reasonable. Putting your company money in a bank account should be safe. We should regulate banks like SVB to make it more safe. We should also make sure when the regulations fail the people who use a bank, they can continue doing business.

depositors are only entitled to what is left over after resolution of the assets, nothing more! dont make this situation worse by advocating for something unethical and which is bad for the entire system

Of course, that is likely what they're getting. People with sub-$250k will be taken care of by the FDIC as expected and the $250k+ depositors will be made whole from the proceeds of asset sales (bonds, securities, et al) held by Silicon Valley Bank. I really don't think the U.S. government will step in to provide additional funds.

It's also possible that the FDIC might sell the remnants of Silicon Valley Bank to a larger bank that will assume all deposits.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#47

Post by mangosteenjuice »

mrkurt wrote: post #32
lp0_on_fire wrote: post #20

Earlier quoted context omitted.

> Also, SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world. They are going to leverage their power and influence to recover as much as they can as quickly as they can. All the more reason regular people need to be screaming to high heaven that those rich and powerful people will get eaten if they push for and eventually receive a b…

There's no bailout. SVB is dead. People are pushing for depositors to get their money back. Which is, I think, reasonable. Putting your company money in a bank account should be safe. We should regulate banks like SVB to make it more safe. We should also make sure when the regulations fail the people who use a bank, they can continue doing business.

It is a bailout for any amount over $250,000

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#48

Post by [deleted] »

epolanski wrote: post #28
lvl102 wrote: post #21

Earlier quoted context omitted.

[flagged]

I'll take the reddit-level bait. Yes, the European Union is the biggest financial supporter of Ukraine and that excludes single European countries contributions. US tops the military aid, that's most certainly true and it greatly benefits US defense contractors and their workers. edit: seems like people having problems at reading, as I've said US indeed tops military help which is what the following comment(s) includ…

[deleted]

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#49

Post by lp0_on_fire »

mrkurt wrote: post #40
gregw2 wrote: post #37

Earlier quoted context omitted.

If taxpayers help wealthy depositors get more than their insured amounts, (and more than a normal liquidation of assets) that is a bailout It may or may not be the right thing to do, but it most definitely is a bailout.

Yes that's reasonable. That's probably not what's happening here. In some ways, the _promise_ of the FDIC getting depositors almost all their money back is enough. The biggest problem people have right now is time. Over time, everyone will probably get most of their deposits from SVB back from SVB assets. What people (the ones who know what they're talking about, anyway) are asking for is closer to taxpayers covering…

> Over time, everyone will probably get most of their deposits from SVB back from SVB assets.

> What people (the ones who know what they're talking about, anyway) are asking for is closer to taxpayers covering the costs of getting that money back sooner. There's a definite cost, but it's not taxpayers writing checks to cover deposit values.

Except it's literally asking the taxpayer to cover the costs to cover these funds for some indeterminate period of time in the HOPES that SVB will "probably" be able to make their depositors whole, someday.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#50

Post by boeingUH60 »

mistrial9 wrote: post #2

with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto. IMO - almost all the leveraged finance in the last 20 years is already over-the-top and mostly "fake money".. who gets the axe first is politics. Supporting statement to this heresy? When the "real economy" tanked due to covid-19 lockdown, the pape…

> Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf

This is arrogant. There are many billion-dollar businesses you haven't heard of, most of them in boring industries. For instance, have you heard of Vitol? Likely not...but they made $279bn in revenue in 2021.

https://www.vitol.com/vitol-2021-volumes-and-review/

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