Looks like the US government is going to protect SVB depositors, but SVB investors are on their own.
Another bank, Signature Bank (NY based) has also been shuttered by regulators.
Apparently the government’s thinking is that guaranteeing deposits should prevent any further bank runs.
A whole lot of other banks not going tits-up suggests that maybe, yeah, it is. SVB failed to hedge its massive increase in deposits against the potential for significant inflation despite a couple years of very loose monetary policy.
In 2018 the Republicans greatly increased the capitalization threshold for application of the Frank-Dodda regulations (after lobbying from SVB, among other institutions). This had the effect of reversing regulations put in place after the 2008 financial crisis.
Protecting depositors and letting the bank’s investors eat the torpedo seems appropriate in this case. Hopefully securities regulators take a good close look at the insider sales of SVB stock by SVB executives in the past few weeks. I’m not saying those sales were shady, but they certainly look shady.
Neither did the financial privilege I enjoy. We’re both insulated by our own relative success from experiencing the hard reality many people face, but you also seem to be insulated from even awareness of that reality. This leads you to say some rather startling and tone-deaf things. Ironic that even on this very site we talk about CAF members living at the edge of poverty due to rising expenses. You seem to think people can choose their way out of it.
The reality is that the prosperous corporate success often relies on the labour of a lot of poor people doing the grunt work at the bottom. The system may be set up to afford opportunity to some of them individually, but it’s not set up to let the bulk of low-wage workers find a way out of that. Our economy self-corrects a certain proportion of the population into being stuck in the world of low income and the rent trap.
Another bank, Signature Bank (NY based) has also been shuttered by regulators.
Apparently the government’s thinking is that guaranteeing deposits should prevent any further bank runs.
A whole lot of other banks not going tits-up suggests that maybe, yeah, it is. SVB failed to hedge its massive increase in deposits against the potential for significant inflation despite a couple years of very loose monetary policy.
In 2018 the Republicans greatly increased the capitalization threshold for application of the Frank-Dodda regulations (after lobbying from SVB, among other institutions). This had the effect of reversing regulations put in place after the 2008 financial crisis.
Protecting depositors and letting the bank’s investors eat the torpedo seems appropriate in this case. Hopefully securities regulators take a good close look at the insider sales of SVB stock by SVB executives in the past few weeks. I’m not saying those sales were shady, but they certainly look shady.
Neither did the financial privilege I enjoy. We’re both insulated by our own relative success from experiencing the hard reality many people face, but you also seem to be insulated from even awareness of that reality. This leads you to say some rather startling and tone-deaf things. Ironic that even on this very site we talk about CAF members living at the edge of poverty due to rising expenses. You seem to think people can choose their way out of it.
The reality is that the prosperous corporate success often relies on the labour of a lot of poor people doing the grunt work at the bottom. The system may be set up to afford opportunity to some of them individually, but it’s not set up to let the bulk of low-wage workers find a way out of that. Our economy self-corrects a certain proportion of the population into being stuck in the world of low income and the rent trap.
