3 ms·

Silicon Valley lobbying to be Too Big To Fail. I predict they will get their way. What a complete joke. They'll be laughing all the way to the (solvent) bank.

riskneutral 4y ago
This is really more of an embarrassment for the banking industry and bank regulators. The immediate threat is also to the banking system itself, as the question on everyone's mind is which bank will have a run on it next. That is definitely not the kind of situation that the world needs to wake up to on Monday. I'm really hoping they'll announce that a collection of some banks (or ideally all US banks with Fed accounts) has pooled resources together into a fund that will bail out SVB and any of its peers that might need bailing out. Since bank runs psychological, the act of announcing that a bank on the brink of a run will be bailed if a run happens would hopefully prevent the run from happening. After the banking industry is done bailing SVB out, US banking regulators should require banks like SVB to better manage their concentration risks. If we don't wake up to a situation on Monday morning where every SVB depositor has been somehow promised that they'll made whole, then the Fed will be repeating the exact same experiment it tried when it allowed Lehman Brothers to fail. The lesson from that little episode was that if you allow the first bank to fail instead of bailing it out, then you'll set off a chain reaction where you'll be forced to bail out multiple banks instead of just ones and your economy will be left a smoking ruin as a result.
- chitowneats 4y ago
  LFG (let's fucking go). I've been repeatedly told that failure is good; that it's "corrective". SV needs to put its money where its big fat mouth is. In reality, they are total grifters who will milk the general public for every dime they can get. !remind me 6 months

riskneutral 4y ago

This is really more of an embarrassment for the banking industry and bank regulators. The immediate threat is also to the banking system itself, as the question on everyone's mind is which bank will have a run on it next. That is definitely not the kind of situation that the world needs to wake up to on Monday. I'm really hoping they'll announce that a collection of some banks (or ideally all US banks with Fed accounts) has pooled resources together into a fund that will bail out SVB and any of its peers that might need bailing out. Since bank runs psychological, the act of announcing that a bank on the brink of a run will be bailed if a run happens would hopefully prevent the run from happening. After the banking industry is done bailing SVB out, US banking regulators should require banks like SVB to better manage their concentration risks. If we don't wake up to a situation on Monday morning where every SVB depositor has been somehow promised that they'll made whole, then the Fed will be repeating the exact same experiment it tried when it allowed Lehman Brothers to fail. The lesson from that little episode was that if you allow the first bank to fail instead of bailing it out, then you'll set off a chain reaction where you'll be forced to bail out multiple banks instead of just ones and your economy will be left a smoking ruin as a result.

chitowneats 4y ago
LFG (let's fucking go). I've been repeatedly told that failure is good; that it's "corrective". SV needs to put its money where its big fat mouth is. In reality, they are total grifters who will milk the general public for every dime they can get. !remind me 6 months