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As someone that is not following this as closely as I would like, does the collapse of this bank have nothing to do with FTX and Crypto?
by yalogin 4y ago
As someone that is not following this as closely as I would like, does the collapse of this bank have nothing to do with FTX and Crypto?
- morelisp 4y agoOnly indirectly; the tide is receding for the first time in many years, and it's exposing a variety of... issues.
- UncleOxidant 4y agonaked swimmers.
- tekla 4y agoFTX was simple fraud. This isn't really related and is more standard bank taking on wayy too much risk.
- thepasswordis 4y agoFTX was because they took customer deposits and gambled with them, lost the gamble, and therefore lost the money.
- mannerheim 4y agoYes, but it was also fraud because they weren't supposed to gamble with that money because they were an exchange, not a bank.
- fullsend 4y agoWhat is different here? FTX bought shitcoins. SVB bought MBS. They gambled rates wouldn’t change and customer’s wouldn’t withdraw.
- jandrese 4y agoOnly indirectly. They released a statement after the FTX collapse saying effectively "don't worry, no problem here", which caused a bank run that they couldn't manage and forced the collapse.
- kevin_thibedeau 4y agoJedi mind trick only works if you're a Jedi.
- deleted 4y ago[deleted]
- timy2shoes 4y agoThey are related in that crypto (and ftx) and the massive explosion of start-ups are a low-interest rate phenomena.
- UncleOxidant 4y agoGiven the timing one wonders if Silvergate had more impact on SVB. SVB claimed to have minimal crypto exposure, but one wonders what might come out as the FDIC digs deep into their books. But mostly this was because they bet the farm on long duration bonds just before a period of rising interest rates. It's not like nobody saw that rising rates were on the horizon.
- dehrmann 4y agoI'd say they're unrelated. This situation could hit any US bank that placed the wrong bet. What's somewhat unusual, and might shelter other banks, is the bank run was viral among VC-backed firms. They also had a stronger incentive to withdraw a lot more because their funds weren't insured. A bank with lots of retail customers doesn't have this issue.