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Framed another way, we're asking for the government to take some ownership of their stewardship of banks. The Treasury, the Fed, the CA gov, and the ratings ag
by x0x0 4y ago
Framed another way, we're asking for the government to take some ownership of their stewardship of banks. The Treasury, the Fed, the CA gov, and the ratings agencies all gave svb passing grades. svb appears not to have done crypto speculation.
The svb ceo asked congress to weaken Dodd-Frank. If that's a bad idea, then congress should say no; that's their job.
Apparently banking over trivial amounts of money ($250k isn't even one month's cash use -- ie payroll and health insurance -- for a 15-ish person sfbay company) requiring significant work to make that cash unlikely to just disappear is no way to run a country.
- wpietri 4y agoThe cash was always unlikely to disappear. It's just that even unlikely things happen sometimes. If doing decent treasury management is too darned hard for rich people to do, I don't think that's a problem for the government to manage. Beyond the obvious expedient of using two or three banks, which would have solved most problems for most companies here, there are a number of obvious market-driven solutions. E.g., https://www.difxs.com/ https://www.difxs.com/ or https://www.g2.com/categories/treasury-management https://www.g2.com/categories/treasury-management
- x0x0 4y ago> too darned hard for rich people to do Yeah, this is some ideologically driven smearing of people who are literally like I want to stick my seed round in a checking account and not have that disappear. For what it's worth, I'm not rich; I'm like a hundred-thousandaire. (And not affected, though friends are.) Disappointing to see someone like you gloating that a bank screwed a bunch of small business customers. From reading your writing, I doubt you'd cosign "basic economic services like a checking account are use at your own risk" in almost any other area.
- wpietri 4y agoAh yes, my crazy ideology of "people should generally experience the consequences of their actions, especially when they're doing very well". I get that you want to be able to be handed millions of dollars and have somebody else take care of that for you. Who doesn't want that? I just don't understand why you think it's the job of poorer people to subsidize you if you take a risk with those millions and it doesn't pan out. > "basic economic services like a checking account are use at your own risk" I in fact don't cosign that; I've been very clear that I support mandatory FDIC insurance with its current very generous limit. I also support the FDIC's resolution process where they immediately pay out the $250k and then work hard to quickly pay a large portion of the remainder. That's a giant level of risk reduction. But if somebody is rich enough that they have millions in cash and haven't bothered to take basic precautions like "use two banks", I don't think that's a problem such that (much poorer) taxpayers should be obliged to make it all better. If it happened to a friend I would feel bad for them personally, of course. But not so much that I would be calling for a government bailout. Capitalism works because risks yield both gains and losses. People who don't like that should manage their risks.
- sokoloff 4y agoTaxpayers are not on the hook for any deposit losses here. From the statement: “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
- wpietri 4y agoThat is now the conclusion, but plenty of people were proposing a government bailout of depositors.