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The fact that they filed a last minute report on a Friday night speaks volumes about the amount of withdrawals they must be experiencing. This is about as stro

The fact that they filed a last minute report on a Friday night speaks volumes about the amount of withdrawals they must be experiencing. This is about as strong as a signal they could put out to stop a possible run.

alfalfasprout 4y ago
Strangely I’ve heard about a lot of deposits to first republic in the last 24 hours. It’s unclear your assumption is correct.
- anxman 4y ago
  I can confirm knowledge of this as well
  - somsak2 4y ago
    i cannot confirm this
  - everybodyknows 4y ago
    Could those have been deposits of public funds?
    - nostrademons 4y ago
      The $42B that depositors pulled out of SVB has to go somewhere. FRB is the next-best-choice for many startups; they are also startup-friendly, have plenty of branches in Silicon Valley, make it pretty easy to open an account, many of these companies may already have accounts or banking relationships with them, etc. This is one way in which the current crisis is self-limiting. It was brought about because SVB took lots of deposits when rates were low and invested them when bond prices were high, and now they don't have liquidity without taking a loss. But if banks take lots of deposits now and invest them when bond prices are low, their average cost goes down and it's much easier for them to satisfy customer withdrawals without taking large losses. It becomes a crisis again if all the banks start failing at once, because then the likely consumer behavior is a flight to hard cash or crypto rather than another bank.
robbiet480 4y ago
Fwiw this came out around 9:30am PT (~9 hours ago from this comment), was only just posted to HN this evening.
huitzitziltzin 4y ago
Another interpretation is that this is generally how the FDIC likes to do things: take over on Friday and reopen on Monday. Not sure that will happen in this case but the regulators get two days to prepare to reopen, which at least in recorded US history is seamless and without risk for retail depositors.
- hackernewds 4y ago
  The 2-day shutdown is hence critical for the functioning of the financial system. Same for reporting earnings afterhours. Those calling for 24/7 trading are aloof of how entrenched systems need change management
  - pishpash 4y ago
    You already have circuit-breakers and other ad-hoc stoppages. The market needs no rest every fricking day.
  - V-eHGsd_ 4y ago
    matt levine has a tongue in cheek post from ... march 2020 (jesus, nearly 3 years ago to the day) that the markets should only be open for 30 minutes. do your research in the other 23 hours and 30 minutes, and trade in the small window. (https://www.bloomberg.com/opinion/articles/2020-03-12/the-bull-market-caught-a-virus?leadSource=uverify%20wall https://www.bloomberg.com/opinion/articles/2020-03-12/the-bu... the section is called "thirty minutes")
    - hnthrowaway0315 4y ago
      Let's do something different. Market opens for all day but you are not allowed to cover a trade in under 6 months.
    - WanderPanda 4y ago
      Why 30 minutes if you could just have a single auction per day?
deleted 4y ago
[deleted]
nico 4y ago
> This is about as strong as a signal they could put out to stop a possible run. Or a desperation signal, which might actually trigger a run. Like what happened with SVB. The minute the CEO of SVB tried to reassure investors and told them everything would be ok if they just kept their deposits with them, immediately everyone started withdrawing. Are the “safe” banks all putting out statements about the strength of their financials? They probably don’t feel like they really need to say anything. They feel safe, and that’s what keeps them safe. The moment they panic, their clients panic. I guess we’ll see what happens.
- arcticbull 4y ago
  The SVB guy said it in the worst possible, least reassuring way.

alfalfasprout 4y ago

Strangely I’ve heard about a lot of deposits to first republic in the last 24 hours. It’s unclear your assumption is correct.

anxman 4y ago
I can confirm knowledge of this as well
- somsak2 4y ago
  i cannot confirm this
- everybodyknows 4y ago
  Could those have been deposits of public funds?
  - nostrademons 4y ago
    The $42B that depositors pulled out of SVB has to go somewhere. FRB is the next-best-choice for many startups; they are also startup-friendly, have plenty of branches in Silicon Valley, make it pretty easy to open an account, many of these companies may already have accounts or banking relationships with them, etc. This is one way in which the current crisis is self-limiting. It was brought about because SVB took lots of deposits when rates were low and invested them when bond prices were high, and now they don't have liquidity without taking a loss. But if banks take lots of deposits now and invest them when bond prices are low, their average cost goes down and it's much easier for them to satisfy customer withdrawals without taking large losses. It becomes a crisis again if all the banks start failing at once, because then the likely consumer behavior is a flight to hard cash or crypto rather than another bank.

robbiet480 4y ago

Fwiw this came out around 9:30am PT (~9 hours ago from this comment), was only just posted to HN this evening.

huitzitziltzin 4y ago

Another interpretation is that this is generally how the FDIC likes to do things: take over on Friday and reopen on Monday. Not sure that will happen in this case but the regulators get two days to prepare to reopen, which at least in recorded US history is seamless and without risk for retail depositors.

hackernewds 4y ago
The 2-day shutdown is hence critical for the functioning of the financial system. Same for reporting earnings afterhours. Those calling for 24/7 trading are aloof of how entrenched systems need change management
- pishpash 4y ago
  You already have circuit-breakers and other ad-hoc stoppages. The market needs no rest every fricking day.
- V-eHGsd_ 4y ago
  matt levine has a tongue in cheek post from ... march 2020 (jesus, nearly 3 years ago to the day) that the markets should only be open for 30 minutes. do your research in the other 23 hours and 30 minutes, and trade in the small window. (https://www.bloomberg.com/opinion/articles/2020-03-12/the-bull-market-caught-a-virus?leadSource=uverify%20wall https://www.bloomberg.com/opinion/articles/2020-03-12/the-bu... the section is called "thirty minutes")
  - hnthrowaway0315 4y ago
    Let's do something different. Market opens for all day but you are not allowed to cover a trade in under 6 months.
  - WanderPanda 4y ago
    Why 30 minutes if you could just have a single auction per day?

deleted 4y ago

[deleted]

nico 4y ago

> This is about as strong as a signal they could put out to stop a possible run. Or a desperation signal, which might actually trigger a run. Like what happened with SVB. The minute the CEO of SVB tried to reassure investors and told them everything would be ok if they just kept their deposits with them, immediately everyone started withdrawing. Are the “safe” banks all putting out statements about the strength of their financials? They probably don’t feel like they really need to say anything. They feel safe, and that’s what keeps them safe. The moment they panic, their clients panic. I guess we’ll see what happens.

arcticbull 4y ago
The SVB guy said it in the worst possible, least reassuring way.