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

541–550 of 1001 posts

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

#541

Post by hcknwscommenter »

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.

Your take does not seem to reflect reality to me. SVB did not offer particularly attractive interest rates to depositors. No one banked with SVB because of some extra APR on their savings/checking accounts. SVB mismatched interest rate risk and deposit flight risk, bungled a poorly timed asset sale and report thereof, and then compounded the problem with a few silly comments to the public at exactly the wrong time.

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

#542

Post by londons_explore »

> Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

This tells me there were other banks in a similar position, and those other banks are being offered free money... And those banks don't even have to get rid of their shareholders, bondholders, or upper management.

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

#543

Post by moose_is_loose »

hcknwscommenter wrote: post #541
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.

Your take does not seem to reflect reality to me. SVB did not offer particularly attractive interest rates to depositors. No one banked with SVB because of some extra APR on their savings/checking accounts. SVB mismatched interest rate risk and deposit flight risk, bungled a poorly timed asset sale and report thereof, and then compounded the problem with a few silly comments to the public at exactly the wrong time.

https://twitter.com/PeterContiBrown/status/16350630127753256...

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

#544

Post by bcrl »

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.

Everyone got their bonus last year. Nobody cares about the future if they've got their cash in hand today.

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

#545

Post by ProjectArcturis »

thefounder wrote: post #264
mgraczyk wrote: post #61

Earlier quoted context omitted.

In cases where you can't predict the future appropriately, sometimes it's better to make prudent decisions that help everyone instead of attempting to punish the sinful. Keep in mind that bank shareholders and senior management are going to get wiped out and fired.

>> and senior management are going to get wiped out and fired. Yeah, let's punish the management like we did in 2008... "SVB executive was Lehman Brothers CFO prior to 2008 collapse" https://m.economictimes.com/news/international/business/svb-...

He didn't work at the part of Lehman that failed, and he didn't work at the part of SVB that failed.

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

#546

Post by treis »

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…

> changing the rules in the middle of the game

Part of the rules are that the regulators are supposed to shut down a bank before the run happens. They're not supposed to let the run happen and let the poor saps that were too slow moving their money bear the brunt of the losses.

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

#549

Post by bengamin56_ »

hcknwscommenter wrote: post #541
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.

Your take does not seem to reflect reality to me. SVB did not offer particularly attractive interest rates to depositors. No one banked with SVB because of some extra APR on their savings/checking accounts. SVB mismatched interest rate risk and deposit flight risk, bungled a poorly timed asset sale and report thereof, and then compounded the problem with a few silly comments to the public at exactly the wrong time.

[flagged]

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

#550

Post by college_physics »

mgraczyk wrote: post #63
ecommerceguy wrote: post #62

I'm just curious, who was running the investment / risk team at SVB and why should they get a pass for doing such a terrible job?

They don't, they got fired already.

They'll be recycled soon enough like the Lehmann guy. There is a talent shortage in the industry.
Post reply on HN