7 ms·

Seems like the best case scenario for everyone. Buy the parent company. Make depositors whole (in theory). Keep all or most of the employees and business model.

Seems like the best case scenario for everyone. Buy the parent company. Make depositors whole (in theory). Keep all or most of the employees and business model. Blame a few upper management folks for causing this, fire them for good PR. Don't lock up most funds again in long bonds.

alexis2b 4y ago
I think the article is about the SVB Securities subsidiary (an investment bank) spinning off itself with a management buy-out. Sadly this is not about the main bank and will not save it. Sort of ejection pod for investment bankers tied to the mothership and deciding it is time to separate… (edited: typo)
- zxspectrum1982 4y ago
  This makes sense
  - funstuff007 4y ago
    in the same way repealing Glass Steagall did not make sense.
    - pksebben 4y ago
      Fun fact: the Volcker rule, which was like the diet glass steagall from 2008, was declawed a couple years ago. This is what happens when you limit liability and bail these people out.
- lobstersammich 4y ago
  Yes, SVB Securities is a separate entity from SVB, the bank. See this press release from PRNewswire: https://www.prnewswire.com/news-releases/svb-securities-continues-its-independent-operations-unimpeded-by-silicon-valley-banks-receivership-proceedings-301769597.html https://www.prnewswire.com/news-releases/svb-securities-cont... SVB Securities LLC recently - at the beginning of last month - changed its name from SVB Leerink LLC to SVB Securities LLC: https://www.svb.com/de/news/company-news/svb-leerink-llc-announces-company-name-change-to-svb-securities-llc https://www.svb.com/de/news/company-news/svb-leerink-llc-ann... The Wikipedia page states that SVB Securities' leadership plans to buy back the company from its parent org, SVB (the bank): https://en.wikipedia.org/wiki/SVB_Securities https://en.wikipedia.org/wiki/SVB_Securities It's sloppy reporting in this article that the reporter mixes up SVB, the bank, with SVB Securities; Joe Gentile is the CAO (Chief Administrative Officer) of SVB Securities / Leerink: - https://www.svbsecurities.com/team/joseph-gentile/ https://www.svbsecurities.com/team/joseph-gentile/ - https://news.yahoo.com/silicon-valley-bank-exec-lehman-000556735.html https://news.yahoo.com/silicon-valley-bank-exec-lehman-00055... Note that 'Yahoo! News' - f/k/a the Verizon Media Group - was bought by Apollo Capital Management a few years ago, so perhaps Apollo is short SVB and that's why 'Yahoo! News' is amplifying this narrative about the CAO having worked at Lehman until 2007; recall that Lehman imploding in 2008 is largely seen as one of the catalysts for the 2008 Global Financial Crisis.
zxspectrum1982 4y ago
After the panic, I really doubt they can survive Monday. First thing every customer will do if they reopen the bank "as a normal business day" is transfer out all their funds, which will make the bank fail again. I'm afraid it's too late.
- norgie 4y ago
  That won't with FDIC involvement. First, until they figure out the long term plan, nobody will be able to take more than the 250k that's covered by the FDIC. Second, the long term plan will probably be that much larger bank takes over that can guarantee most or all the remaining deposits, in which case there's no point in pulling your money out, unless you want to keep $3 billion under your mattress.
  - douglasisshiny 4y ago
    This is what I don't understand about the conversation online. What you described (what I've heard is likely to happen) isn't a bailout. Yet many people are talking about this being a bailout. In this scenario, SVB shareholders would eat the loss, no?
    - sriram97 4y ago
      Shareholders are lowest in the totempole. They get zero. Debt and deposits take priority
    - HWR_14 4y ago
      It's a bailout for the depositors. Some of those depositors are multi-billion dollar companies. However, even though they are above the FDIC limit, there is a good chance they will get most or all of their money back. If the assets are worth enough to more than repay the depositors, shareholders may get a nominal sum when the dust settles, but probably they will get zero.
      - douglasisshiny 4y ago
fsckboy 4y ago
insiders using inside information to cut themselves a sweet deal so we can all watch them get rich on the full faith and credit of the govt, and then I have to hear the majority of HN scream bloody-wealth-gap-murder and advocate trying to undo it with completely inefficient progressive tax policy on the rest of the economy? no thanks. Just shut it down and leave a relatively small number of rich people* not whole (*if you lost substantial assets beyond the FDIC limit in this bank, that means you had substantial assets ie rich, not my problem, I'm diversified. Who even keeps money in the bank anyway, it should always be invested.)
- 0xB31B1B 4y ago
  The large majority of accounts at SVB were held by businesses. The businesses need to make payroll. The problem is businesses not making payroll for their staff.
  - luckylion 4y ago
    They'll certainly get bridge loans to handle that if they're fiscally sound. And there's no indication that "there's nothing left, and everyone has lost everything above $250k", it'll just take a while, and they might lose a few %.
  - startupsfail 4y ago
    There are these $40b dollars that were transferred from the bank during bank run? Can maybe the the VCs responsible for the bunk run step in and pitch in 5% from that to fund the payroll?
    - JumpCrisscross 4y ago
      SVB claims are trading around 60¢ on the dollar. Nobody should be more than a few days delayed on near-term payroll.
      - johnbellone 4y ago
        Are uninsured deposits going to only receive 60¢ on the dollar?
deleted 4y ago
[deleted]

alexis2b 4y ago

I think the article is about the SVB Securities subsidiary (an investment bank) spinning off itself with a management buy-out. Sadly this is not about the main bank and will not save it. Sort of ejection pod for investment bankers tied to the mothership and deciding it is time to separate… (edited: typo)

zxspectrum1982 4y ago
This makes sense
- funstuff007 4y ago
  in the same way repealing Glass Steagall did not make sense.
  - pksebben 4y ago
    Fun fact: the Volcker rule, which was like the diet glass steagall from 2008, was declawed a couple years ago. This is what happens when you limit liability and bail these people out.
lobstersammich 4y ago
Yes, SVB Securities is a separate entity from SVB, the bank. See this press release from PRNewswire: https://www.prnewswire.com/news-releases/svb-securities-continues-its-independent-operations-unimpeded-by-silicon-valley-banks-receivership-proceedings-301769597.html https://www.prnewswire.com/news-releases/svb-securities-cont... SVB Securities LLC recently - at the beginning of last month - changed its name from SVB Leerink LLC to SVB Securities LLC: https://www.svb.com/de/news/company-news/svb-leerink-llc-announces-company-name-change-to-svb-securities-llc https://www.svb.com/de/news/company-news/svb-leerink-llc-ann... The Wikipedia page states that SVB Securities' leadership plans to buy back the company from its parent org, SVB (the bank): https://en.wikipedia.org/wiki/SVB_Securities https://en.wikipedia.org/wiki/SVB_Securities It's sloppy reporting in this article that the reporter mixes up SVB, the bank, with SVB Securities; Joe Gentile is the CAO (Chief Administrative Officer) of SVB Securities / Leerink: - https://www.svbsecurities.com/team/joseph-gentile/ https://www.svbsecurities.com/team/joseph-gentile/ - https://news.yahoo.com/silicon-valley-bank-exec-lehman-000556735.html https://news.yahoo.com/silicon-valley-bank-exec-lehman-00055... Note that 'Yahoo! News' - f/k/a the Verizon Media Group - was bought by Apollo Capital Management a few years ago, so perhaps Apollo is short SVB and that's why 'Yahoo! News' is amplifying this narrative about the CAO having worked at Lehman until 2007; recall that Lehman imploding in 2008 is largely seen as one of the catalysts for the 2008 Global Financial Crisis.

zxspectrum1982 4y ago

After the panic, I really doubt they can survive Monday. First thing every customer will do if they reopen the bank "as a normal business day" is transfer out all their funds, which will make the bank fail again. I'm afraid it's too late.

norgie 4y ago
That won't with FDIC involvement. First, until they figure out the long term plan, nobody will be able to take more than the 250k that's covered by the FDIC. Second, the long term plan will probably be that much larger bank takes over that can guarantee most or all the remaining deposits, in which case there's no point in pulling your money out, unless you want to keep $3 billion under your mattress.
- douglasisshiny 4y ago
  This is what I don't understand about the conversation online. What you described (what I've heard is likely to happen) isn't a bailout. Yet many people are talking about this being a bailout. In this scenario, SVB shareholders would eat the loss, no?
  - sriram97 4y ago
    Shareholders are lowest in the totempole. They get zero. Debt and deposits take priority
  - HWR_14 4y ago
    It's a bailout for the depositors. Some of those depositors are multi-billion dollar companies. However, even though they are above the FDIC limit, there is a good chance they will get most or all of their money back. If the assets are worth enough to more than repay the depositors, shareholders may get a nominal sum when the dust settles, but probably they will get zero.
    - douglasisshiny 4y ago

fsckboy 4y ago

insiders using inside information to cut themselves a sweet deal so we can all watch them get rich on the full faith and credit of the govt, and then I have to hear the majority of HN scream bloody-wealth-gap-murder and advocate trying to undo it with completely inefficient progressive tax policy on the rest of the economy? no thanks. Just shut it down and leave a relatively small number of rich people* not whole (*if you lost substantial assets beyond the FDIC limit in this bank, that means you had substantial assets ie rich, not my problem, I'm diversified. Who even keeps money in the bank anyway, it should always be invested.)

0xB31B1B 4y ago
The large majority of accounts at SVB were held by businesses. The businesses need to make payroll. The problem is businesses not making payroll for their staff.
- luckylion 4y ago
  They'll certainly get bridge loans to handle that if they're fiscally sound. And there's no indication that "there's nothing left, and everyone has lost everything above $250k", it'll just take a while, and they might lose a few %.
- startupsfail 4y ago
  There are these $40b dollars that were transferred from the bank during bank run? Can maybe the the VCs responsible for the bunk run step in and pitch in 5% from that to fund the payroll?
  - JumpCrisscross 4y ago
    SVB claims are trading around 60¢ on the dollar. Nobody should be more than a few days delayed on near-term payroll.
    - johnbellone 4y ago
      Are uninsured deposits going to only receive 60¢ on the dollar?

deleted 4y ago

[deleted]