Silicon Valley Bank

SVB-UK has been sold to HSBC for 1£. Approximately 6.8B£ in deposits in the UK were protected.

 

Oh my, wasn’t Dodd-Frank ( which caused all of us a substantial amount of money and inconvenience) supposed to prevent this?

 

Well, those lockdowns were a very large part of all of the economic idiocy of the last three years. It’s not unreasonable at all to debate that.

 

I had a very animated debate with a young woman at a bar back in 2020 when Florida opened back up for business. She basically thought that I was a fool for not diving headfirst into crypto as she and her friends had done. I hope they got out of that crap early enough to keep their money.

 

Actually, if Dodd-Frank requirements were not changed in 2018 by Republicans, there is a good chance this does not happen. Had the threshold for being a "Systematically Important Bank" was not changed to $50B from $250B in assets for regional banks, we are probably not in this boat this AM. Oh by the way, the CEO of SVB was one of the main lobbyists for weakening Dodd-Frank for regional banks.

 

Don’t let your hatred for DeSantis cloud your better judgement. DEI has taken on a life of its own in many, if not all corporate cultures. At a minimum, it has allowed too many people to “take their eye off the ball” on their real jobs and at its worst it has put too many of the wrong people into positions of authority. I have seen this personally. I hire the best people available for open positions and have a very diverse management staff. But many other execs I know have more or less cleaned house over the last few years and put too many people into jobs that they weren’t prepared for and it shows.

I don’t know enough about SVB’s practices in this regard to comment, but I do know that banks do have Risk Management departments whose job it was to prevent this, or at least minimize the damage. It is now painfully obvious that SVB was rife with incompetence. It is fair game to discuss all possibilities/reasons that they had this level of incompetence running the show at such a large bank.

 

That is nonsense and you know it.

 

Actually, I don't and more and more people are realizing/recognizing it in the aftermath of yet another bailout.

 

Yes, more and more people who listen idiotic bullshit from the mainstream and social media rather than use their own good judgement and common sense. Not being Systemically Important is not a license to act stupidly.

 

So, much like De-Idiot, you know nothing about what is going on at SVB, but you are going to editorialize and complain about your latest pet-hatred anyway. More examples of people spouting off about things they have no idea about.

Meanwhile, 30+ years at Silicon Valley companies and I have seen diversity initiatives for most of my career. Those companies usually have small departments dedicated to the "appearance" of DEI. Not one company I have ever worked at, including my current employer, gives a good flying cr@p about it beyond satisfying the bare minimum government regulations in EEOC and doing the bare minimum to placate "activist investors". And by bare minimum, I mean very bare minimum.

Maybe that is not how it is in other fields, though I suspect it is.

 

That is not what you said. You said, in your best ignorant, yet sarcastic tone that Dodd-Frank was supposed to prevent that. I factually pointed out that the Republicans placated their base by gutting Dodd-Frank and allowing this very failure at a so-called Regional Bank. You then got pissy because I showed you were wrong and then went off about "not a license to act stupidly". That has nothing to do with the regulation, now you are criticizing the behavior of the bank executives...which is what Dodd-Frank was put in place to protect against!!!

 

The bank didn’t make subpar loans or take undue credit risk. They unknowingly took massive interest rate risk by investing their reserves in treasuries.

 

Biden is “going to hold those responsible for this accountable”. Bahahaha. Go ahead and charge the Fed then for their incompetence.

 

You’re suspicion is correct.

 

Pissy? Take a good look in the mirror when you shave this morning. I pointed out the obvious. You are trying to defend the stupid. Dodd Frank changes are not what allowed this to happen. Dodd Frank changes are not what allowed the reaction to the lobbying over the weekend to insure deposits above the FDIC limit. I believe you know that but are too vested in both your leftist ideology and your DeSantis hatred won’t let you see it and you damn sure will never admit it.

You can choose to ignore the writing on the wall but I hope you at least have the common sense to protect your assets from what lies ahead. You can’t possibly not see the connection here of foolish Covid shutdowns, idiotic liquidity responses, the predictable interest rate increases, and now the predictable collapses of the weaker, stupid banks that didn’t know what they were doing.

 

it would have, except Trump cut key parts of it out to reduce regulation. how a bank like SVB got wrapped into the same group of local credit union banks is in the details where favors get bought

note..it was bipartisan in that they got 3 or 4 dems in senate to vote for it.

Trump signs Dodd-Frank rollback | The Hill

President Trump on Thursday signed a bipartisan bill to loosen key portions of the Dodd-Frank Act of 2010, cementing the first major changes to President Obama’s landmark banking law.

Trump enacted the legislation during a White House ceremony two days after the House of Representatives passed the bill to exempt dozens of banks from strict federal regulation.

Trump had pledged to “dismantle” Dodd-Frank, a law long targeted by Republicans, and touted the bill he signed as the first step in that process. While the bill will release dozens of banks from stronger Federal Reserve oversight, it falls well short of the president’s vow to repeal and replace Dodd-Frank.

“We’ve kept a lot of promises,” Trump said. “This is truly a great day for America,

 

Even if they didn’t get involved in sketchy paper like the MBS-subprime crisis or this isn’t connected to crypto, obviously at some level they did take undue risk, hence their failure. Their poor capital ratios put them in position to need to raise capital. This was before the panic, and executives obviously knew about this well in advance given the heavy “insider selling” of shares.

Now considering the value of the stock earlier in the year, raising a few billion out of the public markets to shore up capital ratios probably should not have created a panic for depositors. Yet it did. Depositor Panic is the enemy of any bank. No bank can exist when there is a run on it’s deposits. It’s a bit of a chicken and egg scenario as once money starts flowing out, capital ratios can get ugly quickly, which fuels more panic or possibly spreads to other similarly positioned banks.

 

Ok, I see all of your points, but they set a precedent here when they already said they wouldn't do bail outs ever again. The only way this works if they carefully sell off assets to keep things floating long enough that SVB's depositors calm down. But that all depends on the FDIC, because unless they cap withdrawals, the US government will have a hard time coming up with $300B in cash. It's not like SVB is broke, they have worthy assets. Silvergate is another story altogether. What they lost in December was 4 times the profit they earn since 2016. Buy a few Billion is easy to manage. But with SVB they are walking on egg shells. Any contagion that starts to infect the entire sector the game is over. I still think if that were to occur, they will use bail-ins. The Fed is in a precarious situation because all of this is their doing.

 

the insider selling, industry leading bonuses, and big company dinner before closing the doors should land people behind bars and subject to forfeitures.

Panic and partying reign at SXSW amid Silicon Valley Bank’s collapse (yahoo.com)

Less than 24 hours before its collapse, Silicon Valley Bank, known throughout the tech industry as SVB, hosted a private dinner for a couple dozen people at Perry’s Steakhouse & Grille in downtown Austin, a short walk from the convention center that hosts South by Southwest. Jake Chapman, a partner at the defense investment firm Marque Ventures, said he ordered the house specialty pork chop.

 

GS now says they do not expect rate hike at the next fed meeting

Goldman analysts no longer expect Fed rate hike in March after SVB failure | Reuters