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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.

by zerop 4y ago

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
  - epolanski 4y ago
    Yes, the US financial system allows bank to have more ways to make money. And lose it. US is also the investment capital of the world, so it's quite unsurprising.
  - sangnoir 4y ago
    Which do you value more[1] in your jurisdiction: a larger market cap for banks, or having 100% coverage of depositor funds? Its no contest from my point of view. 1. Indirectly - which group do you value more: investors or depositors?
- lvl102 4y ago
  [flagged]
  - epolanski 4y ago
    I'll take the reddit-level bait. Yes, the European Union is the biggest financial supporter of Ukraine and that excludes single European countries contributions. US tops the military aid, that's most certainly true and it greatly benefits US defense contractors and their workers. edit: seems like people having problems at reading, as I've said US indeed tops military help which is what the following comment(s) include. What seems people don't understand is that this kind of (military) help, albeit absolutely critical to Ukraine, is money that stays in US. Every himars rocket fired by Ukraine it's 170k $ being paid to Lockheed Martin.
    - deleted 4y ago
      [deleted]
    - lvl102 4y ago
      So when US helps it’s all for our benefit? Since you are conflating simple facts, and you think it’s so enterprising to fund military spend in Ukraine, why don’t you lots in EU fund that as well? Seems brilliant really. Let me be clear, NATO doesn’t help the US at all. The only reason why NATO is in place is because without it the Soviets would’ve taken over the entire continent. As evidenced by the past two world wars, Europeans love to start wars they can’t seem to finish. NATO is there because it’s actually cheaper than the alternative for the US which is basically millions of lives to defend foreign land.
- jcranmer 4y ago
  AIUI, both the EU and the US primarily rely on Basel III for regulations, which means there's no meaningful difference in collateralization requirements of banks. Okay, there is one meaningful difference: larger banks have higher requirements, and since the US banks tend to be larger, that means that the US tends to have higher requirements than the EU...
  - malermeister 4y ago
    There's another, more meaningful difference: In the EU, all banks are subject to Basel III. In the US, only large, international ones are. SVB wasn't. > When the Fed implemented Basel III in October 2020, they took advantage of the fact that strictly speaking, the Basel Accords are only internationally agreed to apply to “large, internationally active” banks. While most jurisdictions apply the Basel rules to their entire banking system anyway, the US has a strong and powerful community bank lobby, and US community banks are usually quite aggressive in their use of the borrow-short/lend-long business model. https://www.ft.com/content/c95e7708-b903-405d-a017-963844eb3dc3 https://www.ft.com/content/c95e7708-b903-405d-a017-963844eb3...
- mrkurt 4y ago
  Does the EU require 100% _liquid_ collateral? Because European banks are also at risk from bank runs. Any bank that makes loans is. SVB (probably) more than 100% deposit collateral. It just lost value very quickly.

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.

by 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
- epolanski 4y ago
  Yes, the US financial system allows bank to have more ways to make money. And lose it. US is also the investment capital of the world, so it's quite unsurprising.
- sangnoir 4y ago
  Which do you value more[1] in your jurisdiction: a larger market cap for banks, or having 100% coverage of depositor funds? Its no contest from my point of view. 1. Indirectly - which group do you value more: investors or depositors?
lvl102 4y ago
[flagged]
- epolanski 4y ago
  I'll take the reddit-level bait. Yes, the European Union is the biggest financial supporter of Ukraine and that excludes single European countries contributions. US tops the military aid, that's most certainly true and it greatly benefits US defense contractors and their workers. edit: seems like people having problems at reading, as I've said US indeed tops military help which is what the following comment(s) include. What seems people don't understand is that this kind of (military) help, albeit absolutely critical to Ukraine, is money that stays in US. Every himars rocket fired by Ukraine it's 170k $ being paid to Lockheed Martin.
  - deleted 4y ago
    [deleted]
  - lvl102 4y ago
    So when US helps it’s all for our benefit? Since you are conflating simple facts, and you think it’s so enterprising to fund military spend in Ukraine, why don’t you lots in EU fund that as well? Seems brilliant really. Let me be clear, NATO doesn’t help the US at all. The only reason why NATO is in place is because without it the Soviets would’ve taken over the entire continent. As evidenced by the past two world wars, Europeans love to start wars they can’t seem to finish. NATO is there because it’s actually cheaper than the alternative for the US which is basically millions of lives to defend foreign land.
jcranmer 4y ago
AIUI, both the EU and the US primarily rely on Basel III for regulations, which means there's no meaningful difference in collateralization requirements of banks. Okay, there is one meaningful difference: larger banks have higher requirements, and since the US banks tend to be larger, that means that the US tends to have higher requirements than the EU...
- malermeister 4y ago
  There's another, more meaningful difference: In the EU, all banks are subject to Basel III. In the US, only large, international ones are. SVB wasn't. > When the Fed implemented Basel III in October 2020, they took advantage of the fact that strictly speaking, the Basel Accords are only internationally agreed to apply to “large, internationally active” banks. While most jurisdictions apply the Basel rules to their entire banking system anyway, the US has a strong and powerful community bank lobby, and US community banks are usually quite aggressive in their use of the borrow-short/lend-long business model. https://www.ft.com/content/c95e7708-b903-405d-a017-963844eb3dc3 https://www.ft.com/content/c95e7708-b903-405d-a017-963844eb3...
mrkurt 4y ago
Does the EU require 100% _liquid_ collateral? Because European banks are also at risk from bank runs. Any bank that makes loans is. SVB (probably) more than 100% deposit collateral. It just lost value very quickly.