Getting "Application is not available" now at https://connect.svb.com/
I guess that's what bank runs look like in the 21st century... Just 503 errors instead of lineups and riots.
Bank run on Silicon Valley Bank
91–100 of 889 posts
Re: Bank run on Silicon Valley Bank
#92[flagged]
[flagged]
I've flagged this. Please read the HN rules
"Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Please don't fulminate. Please don't sneer, including at the rest of the community.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."
Re: Bank run on Silicon Valley Bank
#93[flagged]
I assume you are trolling, but in case you are not. How would you provide loans to help get businesses started? How would you provide loans to people to buy their first homes? How would you provide loans so people can afford to go to school? How would you provide loans to buy a vehicle so people can get to/from their job before they get a paycheck? How would farmers afford to buy land, equipment and plant crops befor…
Savings. Frugality.
Only consuming what we can actually afford.
Investment with real skin in the game. If you have to take on much higher risk to get returns we will find ourselves being more careful about those returns actually happening.
Re: Bank run on Silicon Valley Bank
#94Earlier quoted context omitted.
Does that provide a better outcome for society than something like FDIC deposit insurance and the occasional run? Seems like for the vast majority of people it does not. Most banks make enough money to pay their FDIC premiums and some interest on demand accounts and profit for their shareholders, and the few that don't are covered by insurance. That seems way better than having to pay a monthly fee to keep my money s…
Yes, it does. Lying is wrong[1]. Therefore, it is bad to base your banking system on it. It's the typical thing where the costs to the system accrete over time and then cause a crisis: the elites are bailed out, the taxpayers eat it. There wouldn't need to be a reserve ratio. A dollar could, in theory, be lent out an infinite number of times, so long as that dollar were lent (and saved) at increasingly shorter durati…
> Lying is wrong
What explicitly is the lie?
Re: Bank run on Silicon Valley Bank
#95Earlier quoted context omitted.
Not if the deposit and loan are duration matched. "I want my money back." "Sure, you can have it in two years."
Who would deposit their money in a bank that wouldn't let them get it back for years?
You are touching on the difference between demand deposits and duration deposits.
If you were charged a small nominal fee for your demand deposits, you would likely say "OK, I'll keep a certain amount in my demand deposit account, and then put the stuff I don't need into longer duration deposits, so I can get some interest."
This would be the right thing, and that money could be safely loaned out at durations shorter than you deposited. You would then be signalling to the market exactly what the demand is for money over time, and it could respond appropriately.
To an extent you do this today: you don't keep all your money in demand deposits, you instead put a lot in the market or whatever. Back in the day, you might have even bought a CD, which is almost exactly what I'm describing, sans the requirement that banks not loan funds they can't guarantee are available for the duration of the loan.
So it's not as crazy as it sounds. It's still crazy, but not as crazy as it sounds.
Re: Bank run on Silicon Valley Bank
#96Earlier quoted context omitted.
Who would deposit their money in a bank that wouldn't let them get it back for years?
CDs?
CDs are definitely not the same as checking and savings accounts though. Most people don't even have any CDs, and the people who do have them also have accounts where they can withdraw money immediately.
I've never seen a bank that only offers CDs. That's probably because such a bank wouldn't survive.
Re: Bank run on Silicon Valley Bank
#97Earlier quoted context omitted.
Not if the deposit and loan are duration matched. "I want my money back." "Sure, you can have it in two years."
Who would deposit their money in a bank that wouldn't let them get it back for years?
People do it all the time already, but it is a minor part of banking sector.
Re: Bank run on Silicon Valley Bank
#98Re: Bank run on Silicon Valley Bank
#99Earlier quoted context omitted.
Who would deposit their money in a bank that wouldn't let them get it back for years?
People do it all the time already, but it is a minor part of banking sector.
Minor part of consumer banking.
For the financial sector at large, treasuries and bonds make up the vast majority of the market
Re: Bank run on Silicon Valley Bank
#100Earlier quoted context omitted.
Not if the deposit and loan are duration matched. "I want my money back." "Sure, you can have it in two years."
Who would deposit their money in a bank that wouldn't let them get it back for years?
I own a few CDs. They’re not an unusual financial product.