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As of right now, yes. Give it a week, and it will get sorted out. In all likelihood, the bank will have a new owner by coming Monday/Tuesday and everyone will b

As of right now, yes. Give it a week, and it will get sorted out. In all likelihood, the bank will have a new owner by coming Monday/Tuesday and everyone will be able to make the transactions.

hn_throwaway_99 4y ago
Agreed. Given that this seems like primarily a timing issue (i.e. SIVB being forced to liquidate bonds at a loss because their tech-heavy depositor base needed their cash), I'd think that a better capitalized and more broadly diversified bank (i.e. not just tech or crypto depositors) would be salivating at the chance to buy these assets up on the cheap.
- bequanna 4y ago
  Buy what assets? From what I understand, SIVB had paper losses which totaled maybe ~30% of deposits before the bank run. If 70% of depositors withdrew before the bank went into receivership there is nothing left. And the assets they held were primarily treasury securities and MBS. Why would anyone sell those “on the cheap” when the market is super liquid?
  - alooPotato 4y ago
    Seems unlikely 70% of companies were able to get their assets out. I guess its 70% of deposits so.... maybe? If there were assets on the books left, the gov't could purchase them at face value and just hold to maturity.
    - t0mas88 4y ago
      The government buying those bonds at face value would be ridiculous. They're worth 80% of face value or less on the open market. So buying them at face value would be a 25% subsidy... Billions of tax money flowing to VC funded startups. That's an absolute no-go. The solution is to wipe out the SVB shareholders, that's the only way to make sure other banks don't have an incentive to do these things. Then pay the startups whatever part of the funds you can recover on the market (may be close to 90% if some comes from SVB shareholders). The VCs may have to step in at a few companies for loosing 10%, but that's likely the ones that weren't doing great anyway. Using tax payer money to save SVB shareholders and some VCs is ridiculous. These guys have enough money, they're all professionals, it's a risk they took and unfortunately they lost this round. Better luck next time.
      - alooPotato 4y ago
        Why is it so ridiculous to buy it at face value? They aren't losing the 25% you're quoting, they are just holding the bonds till maturity. In the worst case they are losing the what they could have "made" on that money in the interim. But realistically this is kind of the governments job no? Put cash where it can help society the most - making the depositors (who are mostly startups) seems like a great use of capital - it ensures employees get paid payroll AND makes sure a bunch of startups don't die (who would have gone on to create a bunch of value/jobs/etc).
      - mike_d 4y ago
        If this were the Bank of Omaha and a bunch of cattle ranches and soy farms were at risk, would you still feel the same way? It is in the governments best interest for people to have faith in banks, regardless of what industry they serve. The FDIC was created because a run on one bank, once it becomes public knowledge, always turns into a run on more banks. They don't want this turning into a line of dominoes.
        landemva 4y ago
        The ranches and farms would not disappear but would become owned by stronger managers. Yes, let them go bankrupt.
      - twblalock 4y ago
        A lot of the people who could suffer because of this are not the people who caused the problems. The biggest risk is that this leads to runs on other banks. People are already looking pretty closely at a few others like First Republic. Deposit insurance exists to reassure people that they won't lose their money, to reduce the temptation to start a bank run. The workers who might not get their next paychecks or could lose their jobs entirely are not to blame for the problem either. VCs will be fine no matter what happens, because they are billionaires. Trying to hurt them will fail and will result in other people getting hurt too. Moral outrage shouldn't be used as an excuse to make a bad problem worse.
        4y ago
toss1 4y ago
For now, there is nothing. A contact who has a college friend who works(/ed?) at SVB as a client service rep says that they were "specifically instructed to make or accept zero communications, emails, or phone calls with SVB clients."
paganel 4y ago
> the bank will have a new owner by coming Monday/Tuesday What due diligence can seriously be carried out by Monday/Tuesday? Especially for a messy "acquisition" like this one.
- dmix 4y ago
  It actually happens all the time with FDIC takeover banks. They run a bidding process so the buyers are pressured to act, you can be sure they are already preparing everything to do this ASAP. They understand timing is really important to rescue these banks, they need to get stability ASAP or tons of value gets destroyed. Potential buyers know this too.

As of right now, yes. Give it a week, and it will get sorted out. In all likelihood, the bank will have a new owner by coming Monday/Tuesday and everyone will be able to make the transactions.

hn_throwaway_99 4y ago

Agreed. Given that this seems like primarily a timing issue (i.e. SIVB being forced to liquidate bonds at a loss because their tech-heavy depositor base needed their cash), I'd think that a better capitalized and more broadly diversified bank (i.e. not just tech or crypto depositors) would be salivating at the chance to buy these assets up on the cheap.

bequanna 4y ago
Buy what assets? From what I understand, SIVB had paper losses which totaled maybe ~30% of deposits before the bank run. If 70% of depositors withdrew before the bank went into receivership there is nothing left. And the assets they held were primarily treasury securities and MBS. Why would anyone sell those “on the cheap” when the market is super liquid?
- alooPotato 4y ago
  Seems unlikely 70% of companies were able to get their assets out. I guess its 70% of deposits so.... maybe? If there were assets on the books left, the gov't could purchase them at face value and just hold to maturity.
  - t0mas88 4y ago
    The government buying those bonds at face value would be ridiculous. They're worth 80% of face value or less on the open market. So buying them at face value would be a 25% subsidy... Billions of tax money flowing to VC funded startups. That's an absolute no-go. The solution is to wipe out the SVB shareholders, that's the only way to make sure other banks don't have an incentive to do these things. Then pay the startups whatever part of the funds you can recover on the market (may be close to 90% if some comes from SVB shareholders). The VCs may have to step in at a few companies for loosing 10%, but that's likely the ones that weren't doing great anyway. Using tax payer money to save SVB shareholders and some VCs is ridiculous. These guys have enough money, they're all professionals, it's a risk they took and unfortunately they lost this round. Better luck next time.
    - alooPotato 4y ago
      Why is it so ridiculous to buy it at face value? They aren't losing the 25% you're quoting, they are just holding the bonds till maturity. In the worst case they are losing the what they could have "made" on that money in the interim. But realistically this is kind of the governments job no? Put cash where it can help society the most - making the depositors (who are mostly startups) seems like a great use of capital - it ensures employees get paid payroll AND makes sure a bunch of startups don't die (who would have gone on to create a bunch of value/jobs/etc).
    - mike_d 4y ago
      If this were the Bank of Omaha and a bunch of cattle ranches and soy farms were at risk, would you still feel the same way? It is in the governments best interest for people to have faith in banks, regardless of what industry they serve. The FDIC was created because a run on one bank, once it becomes public knowledge, always turns into a run on more banks. They don't want this turning into a line of dominoes.
      - landemva 4y ago
        The ranches and farms would not disappear but would become owned by stronger managers. Yes, let them go bankrupt.
    - twblalock 4y ago
      A lot of the people who could suffer because of this are not the people who caused the problems. The biggest risk is that this leads to runs on other banks. People are already looking pretty closely at a few others like First Republic. Deposit insurance exists to reassure people that they won't lose their money, to reduce the temptation to start a bank run. The workers who might not get their next paychecks or could lose their jobs entirely are not to blame for the problem either. VCs will be fine no matter what happens, because they are billionaires. Trying to hurt them will fail and will result in other people getting hurt too. Moral outrage shouldn't be used as an excuse to make a bad problem worse.
      - 4y ago

toss1 4y ago

For now, there is nothing. A contact who has a college friend who works(/ed?) at SVB as a client service rep says that they were "specifically instructed to make or accept zero communications, emails, or phone calls with SVB clients."

paganel 4y ago

> the bank will have a new owner by coming Monday/Tuesday What due diligence can seriously be carried out by Monday/Tuesday? Especially for a messy "acquisition" like this one.

dmix 4y ago
It actually happens all the time with FDIC takeover banks. They run a bidding process so the buyers are pressured to act, you can be sure they are already preparing everything to do this ASAP. They understand timing is really important to rescue these banks, they need to get stability ASAP or tons of value gets destroyed. Potential buyers know this too.