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We banked at SVB and got 0% interest, it was just the bank recommended for Startup’s to use. It seems the risk was not choosing a top 3 bank since no one can s
by hizanberg 4y ago
We banked at SVB and got 0% interest, it was just the bank recommended for Startup’s to use.
It seems the risk was not choosing a top 3 bank since no one can survive a Bank Run and the largest banks are too big to fail. Which is terrible for competition if everyone’s essentially forced to use a top 3 bank just to have confidence for your money in a US Bank to be safe.
- Zetice 4y agoIt's not true that "no one can survive a bank run", though, and that's why SVB is at fault here, and not just a victim of circumstance.
- hellcow 4y agoWell, yeah, that’s why SVB no longer exists, all the execs are canned, and shareholders are losing their shirts. But depositors trusting a highly rated bank with a 40-year history shouldn’t be a “big bet” or gamble. For the risks startups take, this is about the lowest of the bunch.
- cma 4y agoThe risk is low because of the assumed bailouts.
- nostrebored 4y agoSVB collapsed with 3% of depositors asking for their money back?
- hizanberg 4y agoSVB failed after depositors tried to pull out 42B on Thursday, which small US bank has enough liquidity to satisfy 25%+ of all deposits in 1 day?
- nostrebored 4y agoSVB locked in losses after a 3% run that caused them to seek outside capital. They couldn’t cover a third of the previous mandatory fractional reserve without realizing losses. That’s insane. Anyone banking with a bank that doesn’t do liquidity testing is bonkers imo.
- hizanberg 4y agoWhat is the exact % liquidity that your bank can withstand? Should it be the responsibility of every US person to independently and periodically validate their top US 20 Bank has enough liquidity to withstand unforeseen variable economic conditions that bank regulations are supposed to protect against? No, people are just going to move to a top 3 bank that's too big to fail to hold their business and personal life savings.
- lupire 4y agoThey were completely foreseen, and officially announced.
- hizanberg 4y ago> They were completely foreseen Sure which is why their stock crashed 60% in 1 day and their entire 40 years existence wiped out within the week.
- bradleyjg 4y agoShould it be the responsibility of every US person What percentage of Americans have $250,000 in cash?
- hizanberg 4y agoNo idea, how many? Up until now I would've thought keeping your money in a bank was the safest liquid asset class. Is 250k the threshold where you need become a financial bank analyst and independently validate US Banks liquidity tolerance to withstand variable economic conditions? If that's the case everyone's just going to consolidate to using a top 3 bank when exceeding that limit.
- isignal 4y agoDid you consider buying us treasuries instead?
- hizanberg 4y agoNever, the funds are just what's left over after business operations, the entire purpose of which is to conservatively reinvest back to help grow the business and build a buffer to withstand future economic downturns.
- ethbr0 4y ago> Which is terrible for competition if everyone’s essentially forced to use a top 3 bank just to have confidence for your money in a US Bank to be safe. Isn't that the whole point of this decision -- giving depositors at non-top banks confidence in the system? If the FDIC et al. had done the opposite here (let SVB depositors take losses) then the takeaway would have been "bank only with a top-3".