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Bank run on Silicon Valley Bank

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Re: Bank run on Silicon Valley Bank

#741

Post by cj »

mike_d wrote: post #587
cj wrote: post #447

Earlier quoted context omitted.

Citing the justice department’s website: “The requirement that the defendant act with the intent to deprive the owner of his property makes embezzlement a specific intent crime.” Meaning your safe as long as your intent is not to steal the money. But if your concerned definitely ask your lawyer. (Accountant won’t be able to provide that sort of legal advice)

I think what the person you responded to was trying to point out is that commingling business funds with personal funds is not a wise strategy, even if you believe the companies assets are at risk. For one thing you immediately open yourself up to personal liability if any issues arise where someone may sue your company. Such a transfer could be considered a disbursement by the IRS, requiring you to pay taxes (or at…

Yes you should do all those things if you’re comfortable risking all of your company’s money on a bank about to collapse which could happen in a matter of hours.

the legal system is not black and white. You go to court and there’s a judge and possibly a jury that hears your story, and decides if what you did deserves punishment.

Attempting to safeguard your company’s assets hours before a bank’s potential collapse will garner sympathy from just about everyone.

I understand your points; but people banking with SVB may not be able to run this month’s payroll if they don’t move their money. That will cause more problems than anything else we’re talking about right now.

Unfortunately a bank run is very likely due to VCs mass emailing portfolio companies. I hate to be yet another person promoting this, but it’s always best to be the first ones out during a collapse.

Re: Bank run on Silicon Valley Bank

#743

Post by BaRRaKID »

rjzzleep wrote: post #691
shafyy wrote: post #667

Earlier quoted context omitted.

Or Tywin Lannister's "Any man who must say, 'I am the King', is no true king."

[flagged]

You do know that that video is from the TV COMEDY show Servant of the People, where he plays the role of a Ukrainian president BEFORE he was actually elected president?

Re: Bank run on Silicon Valley Bank

#744

Post by cj »

redwood wrote: post #712
Danieru wrote: post #572

Earlier quoted context omitted.

It costs what, a transfer, a bit of explaining to the accountants, and a few days lost interest, to protect your company if SVB pulls through. If you risk it and SVB goes into receivership: you might fail to make payroll. You might not have money for the taxman. You might default on liabilities. These are not balanced risks. Any executive which does not pull their company's money to surefire safety is being negligent…

It's musical chairs once the panic sets in... that's why folks are trying to discourage panic. Another bank will likely swoop in, probably no need to panic

•probably no need to panic” is accurate.

But at least with my company’s money, there’s no room for “probably” when it comes to my ability to pay our employees.

Our company will be dead if we can’t make payroll or if we can’t pay our credit card bills. That’s not something any CEO wants to risk just to avoid a bank run.

A CEO has a fiduciary responsibility which includes making decisions that are in the best interest of the company. Taking no action at this point is just irresponsible.

Re: Bank run on Silicon Valley Bank

#745

Post by tmcz26 »

A few years ago, when our startup was just beginning, our bank simply closed our account out of the blue. I guess it wasn't worth it to them, as we had no revenue yet and bootstrapping, so very little money parked. It took several days to get our money out, we couldn't make payroll and pay vendors in the meantime.

We later opened two accounts in two different banks as a backup/failover strategy. One handled incoming invoices and accounts payable, while the other handled payroll, so we'd always have money flowing through both banks at all times. If one of them failed, locked us out etc. we'd have the other to fall back on. It actually happened once: due to an admin error one of the accounts was locked for 10 days. We just routed payments and receivables to the other bank and went on with our day.

Re: Bank run on Silicon Valley Bank

#746

Post by gadders »

MengerSponge wrote: post #683
gadders wrote: post #670

Earlier quoted context omitted.

I wouldn't call defeating communism and winning the Cold War "societal harm".

"Defeating communism" like this: https://www.youtube.com/watch?v=7AfPFlWnww8

No, by outspending them militarily, encouraging Solidarity in Poland, and forcing Gobarchev to realise the inevitable.

Re: Bank run on Silicon Valley Bank

#747

Post by nemo44x »

So we are a little over a year into this aggressive monetary tightening policy and we are seeing banks begin to appear to fail with base money demand issues like this SVB crisis.

This happened in 1930 a year after the crash started and again in 2009 a year after the events of 2008.

Fed policy will be interesting in the near term. I know they are fighting inflation but they may have to concede this is a battle that will be fought over the next several years and that deliberately destroying the economy through too aggressive rate increases is bad medicine.

Re: Bank run on Silicon Valley Bank

#748

Post by codeulike »

rippercushions wrote: post #15

From https://techcrunch.com/2023/03/09/silicon-valley-banks-share... : Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.” Pro tip: if you're CEO of a bank that's facing a bank run, don't tell the press that you'll be in trouble if everybody takes their money out.

you'll be in trouble if everybody takes their money out.

Every bank would be in trouble if everybody took their money out

Re: Bank run on Silicon Valley Bank

#749

Post by MatteoFrigo »

borski wrote: post #689
soVeryTired wrote: post #687

Earlier quoted context omitted.

Fractional reserve banking isn't a thing anymore.

What? This is literally how nearly all banks around the entire world work.

The Bank of England explains why the fractional reserve mental model of banking is not really accurate. See https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

Re: Bank run on Silicon Valley Bank

#750

Post by boringg »

yawboakye wrote: post #682
rippercushions wrote: post #15

From https://techcrunch.com/2023/03/09/silicon-valley-banks-share... : Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.” Pro tip: if you're CEO of a bank that's facing a bank run, don't tell the press that you'll be in trouble if everybody takes their money out.

i wonder if this is the accidental downside we have to pay for the incredible speed of information these days. not just information in the sense of journalistic report, but also information in the sense of acknowledging and processing transactions. the older i began the more i come to be wary of speed, just for the sake of it (i'm looking at all of you performance engineers). latency might as well be an extremely che…

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