11 ms·

SVB chief pressed lawmakers to weaken bank risk regulations

200 points by yoelo 4y ago

mistrial9 4y ago
with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto. IMO - almost all the leveraged finance in the last 20 years is already over-the-top and mostly "fake money".. who gets the axe first is politics. Supporting statement to this heresy? When the "real economy" tanked due to covid-19 lockdown, the paper tigers of Bloomberg continued to gain wealth, not a little, a lot. Where does that come from? ad sales alone? Oil and Gas Arab cash leveraged out into a hundred counter-parties with big names? Whatever the "technical" explanation.. lots of musical chairs games are up today. cheers edit cannot help but pile on here.. Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf
- phillipcarter 4y ago
  > Roku (who I have never heard of as a consumer) Roku's been around for a very long time building decent streaming boxes for TVs that don't cost too much. I've been a customer since Netflix started streaming.
  - mangosteenjuice 4y ago
    I only know about Roku for three reasons. I had to work on third party software supporting their boxes nearly eight years ago. They were a meme stock for a bit. I made a small profit since I bought a few shares after I first learned about them. And some eng director there randomly added me on LinkedIn years ago. I would have never encountered them as a regular consumer, because I don't watch TV or use any streaming services.
- beardedwizard 4y ago
  It's hard to take your analysis seriously with no knowledge of Roku, a major brand who has existed for a very long time.
- ethanbond 4y ago
  Why? Why don’t you see it as a financial institution taking on a bunch of risk and a regulator attempting to mitigate that risk, then when that risk materializes the public has to step in anyway? It’s the archetypical story of financial history for thousands of years. You can tell that’s the case because we even have FDIC and it is able to shut down a bank on Friday and open it back up on Monday. Literally the oldest story in the book!
- waboremo 4y ago
  The fact that you've never heard of Roku doesn't really say much other than you either living in a country where Roku is not available, or living under a rock. Roku tends to get a lot of retail space, so if you've walked through any walmart electronic section, or bestbuy, or whatever you're guaranteed to see them. Before smart TVs took off there was only Apple TV and Roku. No Chromecasts or Fire Sticks. Meaning if you couldn't pay the Apple tax, you went with Roku to get your Netflix.
  - deleted 4y ago
    [deleted]
- andsoitis 4y ago
  > Roku (who I have never heard of as a consumer) You have commented in threads that reference Roku many times over (e.g. https://news.ycombinator.com/item?id=29338658 https://news.ycombinator.com/item?id=29338658) so you will forgive me for not believing you.
  - mistrial9 4y ago
    I must have missed it due to 'Chainsaw-Wielding, Wooden Samurai Stop Motion Film' distraction ?
- MrMan 4y ago
  SVB was an incompetently run bank whose major business model relied on outright cronyism. they deserve everything they get.
- boeingUH60 4y ago
  > Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf This is arrogant. There are many billion-dollar businesses you haven't heard of, most of them in boring industries. For instance, have you heard of Vitol? Likely not...but they made $279bn in revenue in 2021. https://www.vitol.com/vitol-2021-volumes-and-review/ https://www.vitol.com/vitol-2021-volumes-and-review/
  - fuzzfactor 4y ago
    There's always been money in streaming when you're doing it with pipelines, ships, and barges. Sure it takes decades but this was a startup financed by a small family loan, rather than true venture capital that could more realistically be considered "Other People's Money". So they get to be private, start their exponential growth from a much more retarded point, and have to leverage other people's pipelines, ships, and barges or it wouldn't work. Even in a capitalist market, enough strength can sometimes be built without other people's money, that it can be an unfair advantage compared to the capital-bound operators making up the majority of the market itself. Entrepreneurialism != Capitalism. With Roku I heard of it here and it turns out I had a pretty good idea about their streaming. But no further interest other than to see how they do financially over the years, as a spectator. I'm hardly a consumer at all. So definitely didn't find out about Roku as a consumer. But before I knew it my brother got one, he consumes that stuff and now I'm more familiar than I wanted to be. I would actually call it kind of boring myself.
- unity1001 4y ago
  > with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto I dont know why they are downvoting you. Part of what has been happening for a while is precisely that - East coast 'old money' capital waging one on everyone else and also trying to take out the West coast 'new money' capital as a competitor in the process...
zerop 4y ago
So gradually it's all opening up. The scams at those levels are most impacting one to people. I only see more fallouts in future.
- epolanski 4y ago
  It's amazing how post 2008 nothing was learned by US and pretty much no major bank but top 10 is expected to have more than 5/10% of cash-like collateral of deposits. In Europe, no single bank is allowed to have less than 100% collateral of deposits, not one, and yet they manage to make good money and profits nonetheless.
  - somsak2 4y ago
    EU only has 4 of the top 50 banks by market cap. the us has 10. I'm not saying the us system is necessarily better, but for two economies that are comparable in gdp, that's a big gap. https://companiesmarketcap.com/banks/largest-banks-by-market-cap/ https://companiesmarketcap.com/banks/largest-banks-by-market...
    - capableweb 4y ago
      Having a hard time finding any numbers about it, but how many banks fail in the US compared to Europe? And once they fail, how long time does it take to give people the money they are guaranteed via the insurances? Supposedly, many countries in Europe require banks to have at least 100% collateral of deposits, this should mean resolution in the case of failure be much easier + bank runs less likely to happen, as people can feel safer that their funds actually exists in the bank is liquidity. Unless the bank is operating fraudulently that is.
      - deleted 4y ago
        [deleted]
    - college_physics 4y ago
      how did it come to pass that the more concentrated a sector the better? the exact opposite is true. excessive concentration means an oligopolistic or oligopsonistic sector that is holding everybody hostage: clients, employees and the political / regulatory system at large adulation of "bigness", if not with ulterior motives, is naive
everybodyknows 4y ago
Note that the 2015 lobbying was done by Greg Becker in person. Money quote is at the end: > In 2019, Becker was elected to serve on the board of directors at the Federal Reserve Bank of San Francisco. Becker left the board on Friday.
- chrisbolt 4y ago
  https://news.ycombinator.com/item?id=35105048 https://news.ycombinator.com/item?id=35105048 > This is normal. The CEOs of major regional banks are required by law/regulation to be a director at the regional fed. As he is no longer CEO of a regional bank (it no longer exists) he no longer has the seat.
bratao 4y ago
I want to have sympathy for the depositors, but it is hard to knowing that they chose to keep their funds in an bank that was actively lobbying to weaken risk regulations. There multiple products that would help in this situation, such as insurances and virtual accounts that split between multiple FDIC accounts/banks. Bailing out these depositors would send the wrong message and encourage moral hazard, i.e., the belief that someone else will always bear the costs of risky behavior. Educating entrepreneurs and investors on the importance of diversification, due diligence, and risk management would create a more resilient and sustainable innovation ecosystem, where success is based on merit and hard work, not on cronyism or government intervention.
- ProllyInfamous 4y ago
  "Privatize profits, subsidize losses." It's the global economy way! Hint: nothing will change, depositors and banks will get bailed out. Water is wet.
  - mrkurt 4y ago
    SVB isn't getting a bailout. That company is gone. Their shareholders lost everything they invested. Depositors don't get bailouts. That's not what bailouts are.
    - gregw2 4y ago
      If taxpayers help wealthy depositors get more than their insured amounts, (and more than a normal liquidation of assets) that is a bailout It may or may not be the right thing to do, but it most definitely is a bailout.
      - mrkurt 4y ago
        Yes that's reasonable. That's probably not what's happening here. In some ways, the _promise_ of the FDIC getting depositors almost all their money back is enough. The biggest problem people have right now is time. Over time, everyone will probably get most of their deposits from SVB back from SVB assets. What people (the ones who know what they're talking about, anyway) are asking for is closer to taxpayers covering the costs of getting that money back sooner. There's a definite cost, but it's not taxpayers writing checks to cover deposit values.
college_physics 4y ago
> Touting “SVB’s deep understanding of the markets it serves, our *strong* risk management practices” (Emphasis mine). According to other news [0] they did not have a formally appointed chief risk officer for eight months. While having a puppet CRO is obviously not a sufficient condition to ensure "strong risk management", having a well staffed and - as much as possible - independent risk management department is widely considered best practice [1]. In this instance such an internal body would get on high alert and run scenario upon scenario and stress test as soon as the inflation/interest rate environment changed. [0] https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/ https://fortune.com/2023/03/10/silicon-valley-bank-chief-ris... [1] https://www.bis.org/basel_framework/chapter/SRP/30.htm https://www.bis.org/basel_framework/chapter/SRP/30.htm
ouid 4y ago
Every meaningful financial scheme is the same. Borrow more money than you can be asked to pay back, and gamble it heavily. This is the only way to make money without doing any work. It's theft, very simply, but its hard theft to detect. This theft is made more difficult to efficiently regulate when a blacklist style bottom up approach to regulation is used. If I have to evaluate every investment strategy that calls itself a bank for hidden leverage, I'm guaranteed to miss some. Its a hard game to play, and investigators are humans with both the capacity to make mistakes and be corrputed. This is further dynamically complicated by the fact that the government is the insurer of last resort in a lot of these cases. The FDIC was instituted in response to what happens in the absence of government intervention (the great depression), and it doesnt really stop there. The federal government has the authority to bail out overleveraged "banks" that fail, and banks know this, leading them to seek out even riskier (more correlated) investments. If we cannot consistently identify hidden risk, we need to be taxing the shit out of leverage. We are the ones who are going to be on the hook when the dam breaks, and they file a claim. so we should set the price of the premiums.
OliverJones 4y ago
Regulatory capture, it's called. Man, it does a lot of damage. Long ago I and colleagues opened accounts at SVB for two different outfits with VC money. It was simply the thing to do when getting started converting that money into software that would then produce lots more money. It was simply the thing to do. We didn't have CFOs. We knew darn well our deposits would exceed the household-banking FDIC insurance limit. It would have seemed a brutal waste of very precious time to do an independent background check on our banks. Look, friends, the rule of law is what makes it possible to do business. If we lowly startup entrepreneurs can't trust institutions like banks reliably to provide their services, and we can't trust the government to do their part in maintaining that reliability, who can we trust? Are the next YC classes going to get their financing in Krugerrand gold coins? Are they going to need to look for safes on EBay along with the other gear they need to make the magic happen? Lowly? Yeah. Compared to banks, governments, infosec certification people, even landlords and vendors? Yeah. Lowly. We have to be able to trust our environment at least a little bit to succeed. This regulatory capture is freakin' ridiculous and has to come to an end.
- NordSteve 4y ago
  Startups have to do risk management all of the time -- it's a core activity of entrepreneurship. Can we trust this vendor? Is this new hire going to work out? Will this API vendor scale to what we need/be around in the future? Finance is no different. There are no "safe" investments, only varying levels of risk and reward. Mitigating the risk of a single bank failure locking up your $2MM raise is a couple hours of work. Only you can say whether mitigating that risk is worth the effort.
  - nouveaux 4y ago
    Putting money in a bank is risk management.
    - deleted 4y ago
      [deleted]
    - sillybov3456 4y ago
djfobbz 4y ago
Prior to joining SVB, CEO Gentile was CFO for Lehman Brothers GIB - https://news.ycombinator.com/item?id=35110431 https://news.ycombinator.com/item?id=35110431
- sschueller 4y ago
  He left Lehman Brothers 1 year before the 2008 collapse so I don't think you can connect anything here.
  - tcbawo 4y ago
    The seeds of Lehman’s collapse were planted years before its eventual collapse. Pushing the envelope as far as one can get away with (literally) seems to be the key to success as a banking executive.
  - iancmceachern 4y ago
    Funny, I come to the exact opposite conclusion given that information
lapcat 4y ago
How we get bipartisan corruption: • Lack of public financing for political campaigns. • Lesser of two evils thinking, where each party gives their own politicians a pass because "the other side is worse". • Corporate consolidation of the news media, where the culture and even the personnel of reporting and politics are interchangeable. • "Success" (AKA greed is good) as a national ethos, with no pushback from religion, since the dominant US Christianity has somehow (is there anyone more anti-capitalist than Jesus?) been captured by amoral business interests.
- dehrmann 4y ago
  Regulatory capture isn't the same thing as corruption. In cases like this and the Boeing 737 MAX, the systems are too complex to regulate without some amount of insider input. The problem is it's hard to tell when the input is constructive and when it trades off safety.
  - lapcat 4y ago
    "Two months later, SVB added former Obama Treasury Department official Mary Miller to its board" "Around that time, federal disclosure records show the bank was lobbying lawmakers" "Virginia Sen. Mark Warner (D), for whom Becker held a fundraiser at his Menlo Park, California, home in 2016, according to an invite obtained by The Sunlight Foundation and OpenSecrets. The bank’s political action committee also donated a total of $10,000 to Warner’s campaigns in the 2016 and 2018 election cycles." The "insider input" is money.
  - yterdy 4y ago
    Overengineering is a choice. You can take the slower way, with fewer points of failure, and while you can't (or might not even want to) always stop people from trying to a build a faster solution, you CAN make them pay for the real cost of any adverse incidents which occur under their aegis. If the ship is already burning, you treat the passengers (within reason) and you fine the carrier; you don't bail the latter out, on the promise that they'll make the former whole. The very paradigm of allowing these entities to lobby their way to private profits and socialized losses is indeed corruption.
Animats 4y ago
This is a situation when the board should give the CEO a presentation box with a pistol and one round of ammunition, walk out, lock the door, and wait for the bang.
kitsune_ 4y ago
Always the same story with these guys...

200 points by yoelo 4y ago

with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto. IMO - almost all the leveraged finance in the last 20 years is already over-the-top and mostly "fake money".. who gets the axe first is politics. Supporting statement to this heresy? When the "real economy" tanked due to covid-19 lockdown, the paper tigers of Bloomberg continued to gain wealth, not a little, a lot. Where does that come from? ad sales alone? Oil and Gas Arab cash leveraged out into a hundred counter-parties with big names? Whatever the "technical" explanation.. lots of musical chairs games are up today. cheers edit cannot help but pile on here.. Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf

phillipcarter 4y ago
> Roku (who I have never heard of as a consumer) Roku's been around for a very long time building decent streaming boxes for TVs that don't cost too much. I've been a customer since Netflix started streaming.
- mangosteenjuice 4y ago
  I only know about Roku for three reasons. I had to work on third party software supporting their boxes nearly eight years ago. They were a meme stock for a bit. I made a small profit since I bought a few shares after I first learned about them. And some eng director there randomly added me on LinkedIn years ago. I would have never encountered them as a regular consumer, because I don't watch TV or use any streaming services.
beardedwizard 4y ago
It's hard to take your analysis seriously with no knowledge of Roku, a major brand who has existed for a very long time.
ethanbond 4y ago
Why? Why don’t you see it as a financial institution taking on a bunch of risk and a regulator attempting to mitigate that risk, then when that risk materializes the public has to step in anyway? It’s the archetypical story of financial history for thousands of years. You can tell that’s the case because we even have FDIC and it is able to shut down a bank on Friday and open it back up on Monday. Literally the oldest story in the book!
waboremo 4y ago
The fact that you've never heard of Roku doesn't really say much other than you either living in a country where Roku is not available, or living under a rock. Roku tends to get a lot of retail space, so if you've walked through any walmart electronic section, or bestbuy, or whatever you're guaranteed to see them. Before smart TVs took off there was only Apple TV and Roku. No Chromecasts or Fire Sticks. Meaning if you couldn't pay the Apple tax, you went with Roku to get your Netflix.
- deleted 4y ago
  [deleted]
andsoitis 4y ago
> Roku (who I have never heard of as a consumer) You have commented in threads that reference Roku many times over (e.g. https://news.ycombinator.com/item?id=29338658 https://news.ycombinator.com/item?id=29338658) so you will forgive me for not believing you.
- mistrial9 4y ago
  I must have missed it due to 'Chainsaw-Wielding, Wooden Samurai Stop Motion Film' distraction ?
MrMan 4y ago
SVB was an incompetently run bank whose major business model relied on outright cronyism. they deserve everything they get.
boeingUH60 4y ago
> Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf This is arrogant. There are many billion-dollar businesses you haven't heard of, most of them in boring industries. For instance, have you heard of Vitol? Likely not...but they made $279bn in revenue in 2021. https://www.vitol.com/vitol-2021-volumes-and-review/ https://www.vitol.com/vitol-2021-volumes-and-review/
- fuzzfactor 4y ago
  There's always been money in streaming when you're doing it with pipelines, ships, and barges. Sure it takes decades but this was a startup financed by a small family loan, rather than true venture capital that could more realistically be considered "Other People's Money". So they get to be private, start their exponential growth from a much more retarded point, and have to leverage other people's pipelines, ships, and barges or it wouldn't work. Even in a capitalist market, enough strength can sometimes be built without other people's money, that it can be an unfair advantage compared to the capital-bound operators making up the majority of the market itself. Entrepreneurialism != Capitalism. With Roku I heard of it here and it turns out I had a pretty good idea about their streaming. But no further interest other than to see how they do financially over the years, as a spectator. I'm hardly a consumer at all. So definitely didn't find out about Roku as a consumer. But before I knew it my brother got one, he consumes that stuff and now I'm more familiar than I wanted to be. I would actually call it kind of boring myself.
unity1001 4y ago
> with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto I dont know why they are downvoting you. Part of what has been happening for a while is precisely that - East coast 'old money' capital waging one on everyone else and also trying to take out the West coast 'new money' capital as a competitor in the process...

zerop 4y ago

So gradually it's all opening up. The scams at those levels are most impacting one to people. I only see more fallouts in future.

epolanski 4y ago
It's amazing how post 2008 nothing was learned by US and pretty much no major bank but top 10 is expected to have more than 5/10% of cash-like collateral of deposits. In Europe, no single bank is allowed to have less than 100% collateral of deposits, not one, and yet they manage to make good money and profits nonetheless.
- somsak2 4y ago
  EU only has 4 of the top 50 banks by market cap. the us has 10. I'm not saying the us system is necessarily better, but for two economies that are comparable in gdp, that's a big gap. https://companiesmarketcap.com/banks/largest-banks-by-market-cap/ https://companiesmarketcap.com/banks/largest-banks-by-market...
  - capableweb 4y ago
    Having a hard time finding any numbers about it, but how many banks fail in the US compared to Europe? And once they fail, how long time does it take to give people the money they are guaranteed via the insurances? Supposedly, many countries in Europe require banks to have at least 100% collateral of deposits, this should mean resolution in the case of failure be much easier + bank runs less likely to happen, as people can feel safer that their funds actually exists in the bank is liquidity. Unless the bank is operating fraudulently that is.
    - deleted 4y ago
      [deleted]
  - college_physics 4y ago
    how did it come to pass that the more concentrated a sector the better? the exact opposite is true. excessive concentration means an oligopolistic or oligopsonistic sector that is holding everybody hostage: clients, employees and the political / regulatory system at large adulation of "bigness", if not with ulterior motives, is naive

everybodyknows 4y ago

Note that the 2015 lobbying was done by Greg Becker in person. Money quote is at the end: > In 2019, Becker was elected to serve on the board of directors at the Federal Reserve Bank of San Francisco. Becker left the board on Friday.

chrisbolt 4y ago
https://news.ycombinator.com/item?id=35105048 https://news.ycombinator.com/item?id=35105048 > This is normal. The CEOs of major regional banks are required by law/regulation to be a director at the regional fed. As he is no longer CEO of a regional bank (it no longer exists) he no longer has the seat.

bratao 4y ago

I want to have sympathy for the depositors, but it is hard to knowing that they chose to keep their funds in an bank that was actively lobbying to weaken risk regulations. There multiple products that would help in this situation, such as insurances and virtual accounts that split between multiple FDIC accounts/banks. Bailing out these depositors would send the wrong message and encourage moral hazard, i.e., the belief that someone else will always bear the costs of risky behavior. Educating entrepreneurs and investors on the importance of diversification, due diligence, and risk management would create a more resilient and sustainable innovation ecosystem, where success is based on merit and hard work, not on cronyism or government intervention.

ProllyInfamous 4y ago
"Privatize profits, subsidize losses." It's the global economy way! Hint: nothing will change, depositors and banks will get bailed out. Water is wet.
- mrkurt 4y ago
  SVB isn't getting a bailout. That company is gone. Their shareholders lost everything they invested. Depositors don't get bailouts. That's not what bailouts are.
  - gregw2 4y ago
    If taxpayers help wealthy depositors get more than their insured amounts, (and more than a normal liquidation of assets) that is a bailout It may or may not be the right thing to do, but it most definitely is a bailout.
    - mrkurt 4y ago
      Yes that's reasonable. That's probably not what's happening here. In some ways, the _promise_ of the FDIC getting depositors almost all their money back is enough. The biggest problem people have right now is time. Over time, everyone will probably get most of their deposits from SVB back from SVB assets. What people (the ones who know what they're talking about, anyway) are asking for is closer to taxpayers covering the costs of getting that money back sooner. There's a definite cost, but it's not taxpayers writing checks to cover deposit values.

college_physics 4y ago

> Touting “SVB’s deep understanding of the markets it serves, our *strong* risk management practices” (Emphasis mine). According to other news [0] they did not have a formally appointed chief risk officer for eight months. While having a puppet CRO is obviously not a sufficient condition to ensure "strong risk management", having a well staffed and - as much as possible - independent risk management department is widely considered best practice [1]. In this instance such an internal body would get on high alert and run scenario upon scenario and stress test as soon as the inflation/interest rate environment changed. [0] https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/ https://fortune.com/2023/03/10/silicon-valley-bank-chief-ris... [1] https://www.bis.org/basel_framework/chapter/SRP/30.htm https://www.bis.org/basel_framework/chapter/SRP/30.htm

ouid 4y ago

Every meaningful financial scheme is the same. Borrow more money than you can be asked to pay back, and gamble it heavily. This is the only way to make money without doing any work. It's theft, very simply, but its hard theft to detect. This theft is made more difficult to efficiently regulate when a blacklist style bottom up approach to regulation is used. If I have to evaluate every investment strategy that calls itself a bank for hidden leverage, I'm guaranteed to miss some. Its a hard game to play, and investigators are humans with both the capacity to make mistakes and be corrputed. This is further dynamically complicated by the fact that the government is the insurer of last resort in a lot of these cases. The FDIC was instituted in response to what happens in the absence of government intervention (the great depression), and it doesnt really stop there. The federal government has the authority to bail out overleveraged "banks" that fail, and banks know this, leading them to seek out even riskier (more correlated) investments. If we cannot consistently identify hidden risk, we need to be taxing the shit out of leverage. We are the ones who are going to be on the hook when the dam breaks, and they file a claim. so we should set the price of the premiums.

OliverJones 4y ago

Regulatory capture, it's called. Man, it does a lot of damage. Long ago I and colleagues opened accounts at SVB for two different outfits with VC money. It was simply the thing to do when getting started converting that money into software that would then produce lots more money. It was simply the thing to do. We didn't have CFOs. We knew darn well our deposits would exceed the household-banking FDIC insurance limit. It would have seemed a brutal waste of very precious time to do an independent background check on our banks. Look, friends, the rule of law is what makes it possible to do business. If we lowly startup entrepreneurs can't trust institutions like banks reliably to provide their services, and we can't trust the government to do their part in maintaining that reliability, who can we trust? Are the next YC classes going to get their financing in Krugerrand gold coins? Are they going to need to look for safes on EBay along with the other gear they need to make the magic happen? Lowly? Yeah. Compared to banks, governments, infosec certification people, even landlords and vendors? Yeah. Lowly. We have to be able to trust our environment at least a little bit to succeed. This regulatory capture is freakin' ridiculous and has to come to an end.

NordSteve 4y ago
Startups have to do risk management all of the time -- it's a core activity of entrepreneurship. Can we trust this vendor? Is this new hire going to work out? Will this API vendor scale to what we need/be around in the future? Finance is no different. There are no "safe" investments, only varying levels of risk and reward. Mitigating the risk of a single bank failure locking up your $2MM raise is a couple hours of work. Only you can say whether mitigating that risk is worth the effort.
- nouveaux 4y ago
  Putting money in a bank is risk management.
  - deleted 4y ago
    [deleted]
  - sillybov3456 4y ago

djfobbz 4y ago

Prior to joining SVB, CEO Gentile was CFO for Lehman Brothers GIB - https://news.ycombinator.com/item?id=35110431 https://news.ycombinator.com/item?id=35110431

sschueller 4y ago
He left Lehman Brothers 1 year before the 2008 collapse so I don't think you can connect anything here.
- tcbawo 4y ago
  The seeds of Lehman’s collapse were planted years before its eventual collapse. Pushing the envelope as far as one can get away with (literally) seems to be the key to success as a banking executive.
- iancmceachern 4y ago
  Funny, I come to the exact opposite conclusion given that information

lapcat 4y ago

How we get bipartisan corruption: • Lack of public financing for political campaigns. • Lesser of two evils thinking, where each party gives their own politicians a pass because "the other side is worse". • Corporate consolidation of the news media, where the culture and even the personnel of reporting and politics are interchangeable. • "Success" (AKA greed is good) as a national ethos, with no pushback from religion, since the dominant US Christianity has somehow (is there anyone more anti-capitalist than Jesus?) been captured by amoral business interests.

dehrmann 4y ago
Regulatory capture isn't the same thing as corruption. In cases like this and the Boeing 737 MAX, the systems are too complex to regulate without some amount of insider input. The problem is it's hard to tell when the input is constructive and when it trades off safety.
- lapcat 4y ago
  "Two months later, SVB added former Obama Treasury Department official Mary Miller to its board" "Around that time, federal disclosure records show the bank was lobbying lawmakers" "Virginia Sen. Mark Warner (D), for whom Becker held a fundraiser at his Menlo Park, California, home in 2016, according to an invite obtained by The Sunlight Foundation and OpenSecrets. The bank’s political action committee also donated a total of $10,000 to Warner’s campaigns in the 2016 and 2018 election cycles." The "insider input" is money.
- yterdy 4y ago
  Overengineering is a choice. You can take the slower way, with fewer points of failure, and while you can't (or might not even want to) always stop people from trying to a build a faster solution, you CAN make them pay for the real cost of any adverse incidents which occur under their aegis. If the ship is already burning, you treat the passengers (within reason) and you fine the carrier; you don't bail the latter out, on the promise that they'll make the former whole. The very paradigm of allowing these entities to lobby their way to private profits and socialized losses is indeed corruption.

Animats 4y ago

This is a situation when the board should give the CEO a presentation box with a pistol and one round of ammunition, walk out, lock the door, and wait for the bang.

kitsune_ 4y ago

Always the same story with these guys...