Silicon Valley Bank collapses

[pauldun170]

Guess who's smiling ear to ear

https://twitter.com/x/status/1634777100350783489

Pepperidge Farm remembers

“Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks,” Warren wrote Monday. “They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit S.V.B‌., the‌ bank couldn’t withstand the pressure — and Signature’s collapse was close behind.”

Silicon Valley Bank collapse puts new spotlight on a 2018 bank deregulation law

Democratic Sen. Elizabeth Warren, who led the push against the Trump-era law, now wants to restore the rules on financial institutions. Biden is also calling on Congress to act.

www.nbcnews.com

Warren added that had stricter regulations for small and regional banks remained in place, regular required stress tests could have better prepared SVB for a bank run. She also repeated her constant criticism of the Federal Reserve’s actions under Jerome Powell’s guidance, saying a prioritization of loose monetary policies and low interest rates for much of his term let “financial institutions load up on risk.”

Elizabeth Warren knows exactly why Silicon Valley Bank failed—and who should pay

SVB CEO Greg Becker himself was one of many voices advocating for Dodd-Frank to be loosened. Oops.

fortune.com

Touting “SVB’s deep understanding of the markets it serves, our strong risk management practices”, Becker argued that his bank would soon reach $50bn in assets, which under the law would trigger “enhanced prudential standards”, including more stringent regulations, stress tests and capital requirements for his and other similarly sized banks.

Becker insisted that $250bn was a more appropriate threshold.

“Without such changes, SVB likely will need to divert significant resources from providing financing to job-creating companies in the innovation economy to complying with enhanced prudential standards and other requirements,” said Becker, who reportedly sold $3.6m of his own stock two weeks ago, in the lead-up to the bank’s collapse. “Given the low risk profile of our activities and business model, such a result would stifle our ability to provide credit to our clients without any meaningful corresponding reduction in risk.”

Silicon Valley Bank chief pressed Congress to weaken risk regulations

CEO Greg Becker personally led the bank’s half-million-dollar push to reduce scrutiny of his institution – and lawmakers obliged

www.theguardian.com

How Trump’s Deregulation Sowed The Seeds For Silicon Valley Bank’s Demise

Every couple of years lenders and traders tell me that ‘this time, it will be different.’ Silicon Valley Bank-induced chaos shows that bank deregulation always ends in the same painful way.

www.forbes.com

Silicon Valley Bank Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

Two senior aides to House Speaker Kevin McCarthy were among the top lobbyists for Silicon Valley Bank, the bank at the center of a new financial crisis.

theintercept.com

 

[hal2kilo]

I think the pitchforks need to be put down until a full audit is conducted.

As the thread above insinuates they seemed to be in good standing and in compliance with regulations, of course they probably found some loopholes to try and make more money, well just have to find out what risks they took.

Social media/viral culture is a very real risk, we cant really comprehend what a digital stampede is compared to before digital banking when you physically had to run down to the bank.

I think everyone should understand by now that no bank in the world can survive if a majority of their clients want their money at once.

So surprised. KPMG just last month said they were hunky dorey. How many controversies has this accounting firm been in?

 

[sportage]

Notice, and we do notice... how all of the poor decisions and outright failures from the Trump era have come back to bite Joe Biden in the butt AND THEN Fox News has the gull to blame Joe Biden?

First we had the Trump era train deregulations and NOW we have the train derailments.
First we had the Trump era bank deregulations and NOW we have the bank failures.
And I'm sure you can list many more examples.

I do hope the 2024 voters can do the math, but I seriously doubt it. They will blame Biden, then reelect republicans like Donald Trump, and then people will AGAIN wonder WHY?

 

[IronWing]

Notice, and we do notice... how all of the poor decisions and outright failures from the Trump era have come back to bite Joe Biden in the butt AND THEN Fox News has the gull to blame Joe Biden?

First we had the Trump era train deregulations and NOW we have the train derailments.
First we had the Trump era bank deregulations and NOW we have the bank failures.
And I'm sure you can list many more examples.

I do hope the 2024 voters can do the math, but I seriously doubt it. They will blame Biden, then reelect republicans like Donald Trump, and then people will AGAIN wonder WHY?

<Looks at calendar> Joe has had two years to reverse Trump's executive orders and implement his own regulatory agenda. For legislation, obviously he's had some road blocks.

 

[hal2kilo]

Pepperidge Farm remembers

Silicon Valley Bank collapse puts new spotlight on a 2018 bank deregulation law

Democratic Sen. Elizabeth Warren, who led the push against the Trump-era law, now wants to restore the rules on financial institutions. Biden is also calling on Congress to act.

www.nbcnews.com

Elizabeth Warren knows exactly why Silicon Valley Bank failed—and who should pay

SVB CEO Greg Becker himself was one of many voices advocating for Dodd-Frank to be loosened. Oops.

fortune.com

Silicon Valley Bank chief pressed Congress to weaken risk regulations

CEO Greg Becker personally led the bank’s half-million-dollar push to reduce scrutiny of his institution – and lawmakers obliged

www.theguardian.com

How Trump’s Deregulation Sowed The Seeds For Silicon Valley Bank’s Demise

Every couple of years lenders and traders tell me that ‘this time, it will be different.’ Silicon Valley Bank-induced chaos shows that bank deregulation always ends in the same painful way.

www.forbes.com

Silicon Valley Bank Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

Two senior aides to House Speaker Kevin McCarthy were among the top lobbyists for Silicon Valley Bank, the bank at the center of a new financial crisis.

theintercept.com

Up until this happened one of the biggest bitches I heard coming from the Pubs, about which they were going to have hearings on, were ridiculous capital requirements for regional banks. Who would have thunk it. Bet, they may not have those hearings so fast now.

 

[HomerJS]

This shit will stop when government sets bank standards and when they fail to meet them CEOs start going to jail.

How about this solution? FDIC continues 250K support. Depositors that need higher coverage they purchase insurance through their bank. Come up with an appropriate amount and don't disadvantage small local banks.

All banks would have this requirement.

 

[fskimospy]

This shit will stop when government sets bank standards and when they fail to meet them CEOs start going to jail.

How about this solution? FDIC continues 250K support. Depositors that need higher coverage they purchase insurance through their bank. Come up with an appropriate amount and don't disadvantage small local banks.

All banks would have this requirement.

I think I would just make all deposits FDIC insured and then charge whatever percentage of that is necessary to cover the costs.

 

[Fenixgoon]

I think I would just make all deposits FDIC insured and then charge whatever percentage of that is necessary to cover the costs.

can we still jail CEOs?

 

[Indus]

I think I would just make all deposits FDIC insured and then charge whatever percentage of that is necessary to cover the costs.

I wouldn't mind FDIC limit increased to 1 mil from 250k.

 

[Meghan54]

I wouldn't mind FDIC limit increased to 1 mil from 250k.

How about FDIC ins is free to $500K and a percentage of all amts over that for coverage.

 

[Dave_5k]

How about FDIC ins is free to $500K and a percentage of all amts over that for coverage.

FDIC insurance is funded by banks today (but for that $250k assessed amount only). Any increased amount will also be funded by banks. This bailout will increase the insurance costs to all other banks. (And ignore those trying to pretend this isn't a bailout, it absolutely is a bailout of depositors, backstopped by the US Treasury and draining the FDIC insurance reserves held for all other depositors)

My real problem here is we've once again socialized only the risks while letting management get away scot-free with all the benefits of risk taking or being idiots with people's deposits. (Yes, they are losing their cushy 7-figure salary going forward ~ but only after they walked away with millions or tens of millions in pocket...) At least this time we didn't also backstop their stock investors, but we did just throw a bunch of other people's money at an elite group of rich silicon valley guys that successfully lobbied Washington for a handout/bailout.

 

[trenchfoot]

No matter how the Repubs enable the bank's efforts to feed their need for greed, it's always the Democrats that get blamed for it and then get completely ignored when the Dems clean up what the Repubs made a mess of until the Repubs return to fuck things up all over again from letting their deregulated fellow corporate dog buddies run wild without being held liable AND being bailed out by good 'ol Uncle Sam for good measure. This goes on at the same time the Repubs want to cut back on essential social services for the working class folks of the nation which ironically includes every single middle class conservative who invariably nonsensically vote against their own best interests.

 

[Puffnstuff]

Is First Republic Bank next?

March 13, 2023 Latest on the Silicon Valley Bank collapse

The Federal Reserve announced Monday it has launched a review of the supervision and regulation of Silicon Valley Bank following the lender's sudden implosion.

www.cnn.com

 

[Indus]

No matter how the Repubs enable the bank's efforts to feed their need for greed, it's always the Democrats that get blamed for it and then get completely ignored when the Dems clean up what the Repubs made a mess of until the Repubs return to fuck things up all over again from letting their deregulated fellow corporate dog buddies run wild without being held liable AND being bailed out by good 'ol Uncle Sam for good measure. This goes on at the same time the Repubs want to cut back on essential social services for the working class folks of the nation which ironically includes every single middle class conservative who invariably nonsensically vote against their own best interests.

They should just put these regulations by state governments.. so all failures that happen happen in red states.

Fuck em.

 

[HomerJS]

They should just put these regulations by state governments.. so all failures that happen happen in red states.

Fuck em.

While I like the idea, banking panic knows no state boundaries. One of the reasons Biden took decisive action

 

[trenchfoot]

While I like the idea, banking panic knows no state boundaries. One of the reasons Biden took decisive action

I really do wonder if SVB's executives are going to be penalized (criminally I hope) for their mismanagement of the bank's assets or are they, like so many of the nation's politicians going to slither their way out of being held accountable.

 

[Indus]

While I like the idea, banking panic knows no state boundaries. One of the reasons Biden took decisive action

Actually that's one of the reasons I do agree with getting a national divorce.

Can't talk reason to the stupid.. so lets just do it and be happy amongst ourselves while they have christian orgies and shooting baby in womb with AR-15 showers.

 

[sportage]

Barney Frank and Elizabeth Warren sweat blood to put in place common sense banking regulation. However, republican congresses and republican presidents continue to fight and deregulate those common sense banking regulations. Wonder why that is?
It is because republican congresses and republican presidents know damn well the middle class are the ones taking all the risks, not the McConnell's and never the Trump's. Then, very ignorant voters vote in republican congresses and republican presidents and wonder why those voters keep getting the shaft? And more so, wonder why it is that they the voters must continue to pay the price?
And who says stupidity isn't embedded into the system, or better said inbred into the system.....

 

[HomerJS]

Why is what was done for SVB depositors any different then Biden’s student loan forgiveness? Depositors knew they were only covered up to 250K

 

[Fenixgoon]

I really do wonder if SVB's executives are going to be penalized (criminally I hope) for their mismanagement of the bank's assets or are they, like so many of the nation's politicians going to slither their way out of being held accountable.

i keep hearing people tell me that CEO's can be held liable because they legally have a fiduciary duty to make a company profitable (they don't, but let's roll with it). so, when you crash a whole bank, that means you're going to be held to account, right?.....right????


ahhhhhhh who am i kidding, this is america. privatize profits, socialize losses.

 

[trenchfoot]

i keep hearing people tell me that CEO's can be held liable because they legally have a fiduciary duty to make a company profitable (they don't, but let's roll with it). so, when you crash a whole bank, that means you're going to be held to account, right?.....right????


ahhhhhhh who am i kidding, this is america. privatize profits, socialize losses.

That right there is the whole ball of wax in a nutshell in the kit and kaboodle of what the GOP and their corporate benefactors have been operating in the Congress, Courts and White House (whenever they control it) since I can't remember when.

 

[Zor Prime]

I was hoping SPY would take a notable hit. To my misfortune that didn't materialize. It's like the market didn't give a damn. Hell, during pre-market trading at the moment everything is up. Sigh.

 

[IronWing]

I’m not seeing how mismatching maturity dates on bonds to market conditions is a crime. It proved to be unwise certainly.

For potential criminal activity, investigators would likely focus on the insider trading prior to the collapse but given the flash mob nature of the bank run, demonstrating wrongdoing there may be difficult.

 

[HomerJS]

Has anyone found evidence the SVB collapse was the fault of black and trans people?

DEI caused SVB to over leverage themselves

 

[IronWing]

Has anyone found evidence the SVB collapse was the fault of black and trans people?

DEI caused SVB to over leverage themselves

So far, I haven’t seen any information indicating that the bank was over leveraged, just invested in illiquid bonds. The noises the Fed is making suggests that the assets are there to cover depositors.