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There used to be a TV show in Europe called "Domino Day", where teams competed to build very elaborate domino structures. Used to love the sound of the dominos falling ...
This allows them to borrow and cash out any customer who wants, so long as they have assets.
This program would have saved SVB last week.
People may continue moving around money, but the runs are over.
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.
with this quote from the Treasury Dept statement?
> "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
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…
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.
Wasn’t one of executives working at Lehman Brothers or some such before? This is just failing upwards and doing same thing.
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?
Jay Ersapah, the boss of Financial Risk Management at SVB’s UK branch, launched initiatives such as the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth.
“The phrase ‘you can’t be what you can’t see’ resonates with me,’” Ersapah was quoted as saying on the company website.
“As a queer person of color and a first-generation immigrant from a working-class background, there were not many role models for me to ‘see’ growing up.”
Her efforts as the company’s European LGBTQIA+ Employee Resource Group co-chair earned her a spot on SVB’s “outstanding LGBT+ Role Model Lists 2022,” a list shared in a company post just four months before the bank was shut down by federal authorities over liquidity fears.
[0] https://nypost.com/2023/03/11/silicon-valley-bank-pushed-wok...
Capitalism is supposed to be about profit and loss, you bail out the losers, there is no end to the loss.
I guess we still haven't learned the lessons from 2008. Effective regulation should have been put in place to oversee that banks are effectively managing their risks. Not bailing out companies whenever times get tough.
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?