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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

#61

Post by unity1001 »

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…

> 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

I dont know why they are downvoting you. Part of what has been happening for a while is precisely that - East coast 'old money' capital waging one on everyone else and also trying to take out the West coast 'new money' capital as a competitor in the process...

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#62

Post by lvl102 »

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…

So when US helps it’s all for our benefit? Since you are conflating simple facts, and you think it’s so enterprising to fund military spend in Ukraine, why don’t you lots in EU fund that as well? Seems brilliant really.

Let me be clear, NATO doesn’t help the US at all. The only reason why NATO is in place is because without it the Soviets would’ve taken over the entire continent. As evidenced by the past two world wars, Europeans love to start wars they can’t seem to finish. NATO is there because it’s actually cheaper than the alternative for the US which is basically millions of lives to defend foreign land.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#63

Post by lapcat »

How we get bipartisan corruption:

• Lack of public financing for political campaigns.

• Lesser of two evils thinking, where each party gives their own politicians a pass because "the other side is worse".

• Corporate consolidation of the news media, where the culture and even the personnel of reporting and politics are interchangeable.

• "Success" (AKA greed is good) as a national ethos, with no pushback from religion, since the dominant US Christianity has somehow (is there anyone more anti-capitalist than Jesus?) been captured by amoral business interests.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#64

Post by sangnoir »

somsak2 wrote: post #19
epolanski wrote: post #10

Earlier quoted context omitted.

It's amazing how post 2008 nothing was learned by US and pretty much no major bank but top 10 is expected to have more than 5/10% of cash-like collateral of deposits. In Europe, no single bank is allowed to have less than 100% collateral of deposits, not one, and yet they manage to make good money and profits nonetheless.

EU only has 4 of the top 50 banks by market cap. the us has 10. I'm not saying the us system is necessarily better, but for two economies that are comparable in gdp, that's a big gap. https://companiesmarketcap.com/banks/largest-banks-by-market...

Which do you value more[1] in your jurisdiction: a larger market cap for banks, or having 100% coverage of depositor funds? Its no contest from my point of view.

1. Indirectly - which group do you value more: investors or depositors?

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#65

Post by swatcoder »

mrkurt wrote: post #43
MrMan wrote: post #38

Earlier quoted context omitted.

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?

To provide safe haven for the vast majority of people/orgs whose cash assets can fit in that bucket, since there's some scale at which you can't afford the overhead of privately managed risk management (diversification, private insurance, etc). It provides stability on the low end, especially for naive and casual wealth, so that their naivite doesn't cause problems for everyone else.

But above that bucket, people/orgs are expected to know and appropriately manage the risks that they're taking with their money or have the float to pay someone who does.

Experienced money doesn't see large bank deposits as safe by nature because they never have been. It's only people new to wealth and chronically blind to tail risk (hello startup industry!) that assume a $5M portfolio can be treated as casually as their personal checking account.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#66

Post by BoiledCabbage »

OliverJones wrote: post #29

Regulatory capture, it's called. Man, it does a lot of damage. Long ago I and colleagues opened accounts at SVB for two different outfits with VC money. It was simply the thing to do when getting started converting that money into software that would then produce lots more money. It was simply the thing to do. We didn't have CFOs. We knew darn well our deposits would exceed the household-banking FDIC insurance limit.…

> Regulatory capture, it's called. Man, it does a lot of damage.

It's not regulatory capture. It's plain and simple deregulation. It's the end result of all the people arguing that "federal regulations only slow innovation. Deregulate so we can be more efficient and profit."

There were regulations in place, there were a group of people who like to get rid of regulation. They obliged. They weren't captured, it's practically their platform.

At somepoint people will realize two things. We all live in a society together and thus need regulations to govern actions and interactions.

These regulations are societal insurance. Yes you pay a little bit yearly that you could've used elsewhere for your profit, but they are necessary to avoid the contaigen when disaster strikes.

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#67

Post by malermeister »

jcranmer wrote: post #35
epolanski wrote: post #10

Earlier quoted context omitted.

It's amazing how post 2008 nothing was learned by US and pretty much no major bank but top 10 is expected to have more than 5/10% of cash-like collateral of deposits. In Europe, no single bank is allowed to have less than 100% collateral of deposits, not one, and yet they manage to make good money and profits nonetheless.

AIUI, both the EU and the US primarily rely on Basel III for regulations, which means there's no meaningful difference in collateralization requirements of banks. Okay, there is one meaningful difference: larger banks have higher requirements, and since the US banks tend to be larger, that means that the US tends to have higher requirements than the EU...

There's another, more meaningful difference: In the EU, all banks are subject to Basel III. In the US, only large, international ones are.

SVB wasn't.

> When the Fed implemented Basel III in October 2020, they took advantage of the fact that strictly speaking, the Basel Accords are only internationally agreed to apply to “large, internationally active” banks. While most jurisdictions apply the Basel rules to their entire banking system anyway, the US has a strong and powerful community bank lobby, and US community banks are usually quite aggressive in their use of the borrow-short/lend-long business model.

https://www.ft.com/content/c95e7708-b903-405d-a017-963844eb3...

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#69

Post by mistrial9 »

andsoitis wrote: post #12
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) You have commented in threads that reference Roku many times over (e.g. https://news.ycombinator.com/item?id=29338658 ) so you will forgive me for not believing you.

I must have missed it due to 'Chainsaw-Wielding, Wooden Samurai Stop Motion Film' distraction ?

Re: SVB chief pressed lawmakers to weaken bank risk regulations

#70

Post by dv_dt »

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.

I think it's a mistake to equate simply having an amount of wealth in the 1% worldwide having any significant power or independence. It's basically something of a non-sequitur ignoring what that wealth gets you in context.
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