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

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

#501

Post by adharmad »

reducesuffering wrote: post #247
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…

VC's and YC have burned a lot of credibility overnight with their tech employees during this mask-off moment. I wouldn't be surprised if this forum harbors long term resentment, lack of respect, and a more adversarial relationship going forward. I haven't ever seen such a large lack of respect for them as the past couple days. This industry has gone full Wall St. The next generation of individualist, regulation-disru…

Now that the bailout is done, I hope these guys stop tweeting for the sake of everyone’s sanity.

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

#502

Post by [deleted] »

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…

[deleted]

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

#503

Post by roflyear »

lambic2 wrote: post #254
cragfar wrote: post #164

It's pretty embarrassing how many people thought depositors should be on the hook for this. A banking system where companies or people would actually lose money due to bank failures (especially one caused by a run on the bank) would just lead to people only using BOA, JPM, and some merged WF/Citi/whoever else.

I have a feeling a lot of these people are Bitcoin maximalist. They want depositors to suffer so that they feel vindicated for their faith in Bitcoin.

Nah they just don't want their taxes to pay for this stuff (tho it seems like they won't, I guess?!)

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

#504

Post by ineptech »

nafey wrote: post #302
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.

But, crucially, the shareholders are wiped out. No CEO would be incentivized to repeat the SVB strategy if they stand to make no gains from it.

I don't think oversight comes from shareholders or the CEO, it comes from the customers, right? The desired outcome here is for the companies that banked with SVB to demand more caution from their next bank, meaning they'll pay higher fees; they have no incentive to do that if they don't lose any money in this mess.

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

#505

Post by roflyear »

bcantrill wrote: post #490

I have never seen such cognitive dissonance here at HN -- which I feel is really saying something! As an SVB customer who had to wire payroll on Tuesday, our perspective is naturally sharpened, but I found the lack of empathy here over the weekend galling. On the one hand, this is understandable, and Silicon Valley has done much to earn collective distrust. On the other hand, this is emphatically not all of us: many…

Did you diversify your banking?

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

#506

Post by s1artibartfast »

So, it turns out that the taxpayers are footing the bill to make the depositors whole.

Good day to be an account holder, bad day to be everyone else.

I am sympathetic to the account holders, who are at low fault, but still not happy that the cost gets foisted on the public, who is even less at fault.

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

#507

Post by roflyear »

poof131 wrote: post #252

The part that annoys me the most is the idea that all the depositors are mom and pop small businesses or early stage startups. I’ve heard it said that Circle and USDC have an amazing business model: create a coin, call it a dollar, and deposit real dollars in the bank for interest while customers hold the coin. You don’t even have to offer a percent for the deposit like a normal bank. You can then make a couple perce…

Many of the big banks give effectively 0% interest right now for everyone, so it isn't really that much different, but yeah I agree with your sentiment.

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

#508

Post by pmarreck »

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…

> Yellen has just broadcast that FDIC insurance is essentially unlimited, as long as you can threaten wider disruption to the economy

"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." - J. Paul Getty

(Or as I heard it more aptly paraphrased, "if you owe the bank a million dollars, the bank owns you. If you owe the bank a billion dollars, you own the bank.")

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

#509

Post by beezle »

How is this for comedy:

CNBC: 2023/03/09 "Wells Fargo says buy Signature bank the last game in crypto-town

JPM: 2023/03/09 "JPMorgan predicts customers will migrate to Signature Bank’s Signet payments network. Cryptocurrency firms can incorporate the Signet network into their platforms using application programming interfaces.

However, Signature also faces pressure to minimize crypto risks and recently announced that it would cut crypto deposits by $10 billion. Coinbase recently switched to Signature for its Prime customers."

Barrons 1/19/23: After Silvergate and Signature Earnings, the Worst Might Be Over for Crypto Banks

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

#510

Post by AlchemistCamp »

skwirl wrote: post #381
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…

The people I lost respect for was a large portion of HN commenters calling on bank depositors - largely small businesses - to be snuffed out because there was a run on their bank. The comments have largely been factually wrong, misleading, and downright psychopathic. I am glad our government is not controlled by such people, but I question the value of this forum going forward given the large portion of it that is so…

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