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

Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

home.treasury.gov

Post reply on HN
Print view View original

411–420 of 1001 posts

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#411

Post by BoiledCabbage »

LewisVerstappen wrote: post #235
version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

> prominent VCs behaved during the brief period of uncertainty A ton of the prominent VCs were writing out checks from their personal bank accounts so that founders could meet payroll. > For some silly reason I had some respect for the startup industry before this, now I see it as a joke Wait seriously? You somehow lost more faith from this than you did from - crypto - Adam Neumann - $100m seed rounds and like 30 oth…

And here it starts.. Lots of prominent people have just been exposed by this whole fiasco. 100% truly exposed and they're not gonna like it.

They're gonna want to try to rebuild their reputations. What's coming is a lot of "who are you gonna trust me or your lying eyes?". Starting soon you're gonna hear all the sob stories about how the VCs all this wonderful all did X and Y and Z. And nothing we just saw really mattered. And downplaying how as soon as the going got tough they abandoned all of their SV ethos and immediately went begging to the government to be bailed out.

Be prepared because there will be a huge PR push soon like you haven't seen.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#412

Post by [deleted] »

LewisVerstappen wrote: post #235
version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

> prominent VCs behaved during the brief period of uncertainty A ton of the prominent VCs were writing out checks from their personal bank accounts so that founders could meet payroll. > For some silly reason I had some respect for the startup industry before this, now I see it as a joke Wait seriously? You somehow lost more faith from this than you did from - crypto - Adam Neumann - $100m seed rounds and like 30 oth…

[deleted]

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#413

Post by chernevik »

spaceman_2020 wrote: post #394

Can anyone help me understand why would any bank practice proper risk management after this? SVB took on risk by catering to high risk clients (startups). Growth metrics were great as a result. And stock performed spectacularly (up nearly 6x from April 2020 lows at ath). More conservative banks like JPM, however, saw modest growth. If you're a banker and your salary is tied to stock performance, why not just adopt th…

It won't.

A bank will have to justify its investments to its regulators. And if those regulators have any helpful suggestions about "under-banked sectors" that could use additional capital, management will be very attentive.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#414

Post by belter »

spdustin wrote: post #189
belter wrote: post #54

"...Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law..." Is this what passes for a FED press release? Which law? Clear as mud. Did the Fed just established an infinite deposit insurance coverage in the US?

12 U.S.C. 1817(b)(5) (starting on the bottom right of the page numbered 980, page 5 of this PDF [0]) [0]: https://www.govinfo.gov/content/pkg/USCODE-2021-title12/pdf/...

Yes but also interestingly in Page 4 of that PDF under (2) Setting assessments (A) In general - (B) Factors to be considered

Besides the we can do anything, anytime mentioned in that Pag 5, there is the requirement to in general look at the impact on other banks. Something they clearly could not have the time to do in this short time.

(2) Setting assessments - (A) In general - (B) Factors to be considered

Section (iii) "The projected effects of the payment of assessments on the capital and earnings of insured depository institutions."

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#415

Post by cm2187 »

urthor wrote: post #310
bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

Think of it a different way. Wells Fargo/BoA are "too big to fail" institutions in the United States. They got significant back hand, handshake deals, from Washington institutions to not only stay afloat, but for hundreds of little issues. In essence, the FDIC is a well crafted "redistribution," of all the under the table benefits Wells/BoA get from lobbying the Feds, to the smaller banks. The US has a deep interest…

They mostly get significantly more scrutiny and regulations. The sort of interest rate risk SVB took is shocking to anyone who works in a large bank.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#417

Post by daxfohl »

Octokiddie wrote: post #270

Translation: the Fed is done raising interest rates. Period. Forget all of the tough talk by the team over the last few months. We raise until we break something. Now that we broke it, that's that. As for that inflation problem... It will require another solution...

Or maybe it's what they had to do to justify future rate hikes? I hope so, need some way out of this hole. But certainly billionaires are plotting how to capitalize on it. Feels like 2008 but in much slower motion so the wealthy can squeeze every dollar out of it on the way down.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#419

Post by YZF »

hn_throwaway_99 wrote: post #40

Yellen and the FDIC is in a tough spot. This is the important line, "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law." Thus, on one hand, I'm glad they're doing this, as it should help prevent wider bank runs, and it ensures that banks are the ones that are actually paying for it. At the same time, this is yet another exam…

Where does the money that the banks are going to use to pay for this come from?

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#420

Post by dmm »

loeg wrote: post #102
debacle wrote: post #66

How is this not a bailout?

Well, the term "bailout" usually implies two facts: (1) Shareholders aren't zeroed in a bailout (2) The government pays for a bailout Neither is true here.

> (1) Shareholders aren't zeroed in a bailout

If uninsured depositors took losses in the run on SVB, lots of other banks were going down too in the coming weeks. I think the argument is not that SVB is getting bailed out but investors in all the other poorly funded banks that won't fail.

Post reply on HN