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How did the relaxation of Dodd-Frank lead to what happened at SVB?

• frankbreetz 4y ago
  From what I understand there use to be a stress test. I.E. government employees would hypothetically withdraw a lot of deposits and see what would happen. The threshold for the test was recently changed from 50 billion to 250 billion AUM, so SVB no longer met the threshold and didn't have to do the stress test. I have heard the stress test would have caught this.
  • dilyevsky 4y ago
    Dodd Frank != stress testing and nobody was ever stress testing regional banks. Maybe they should start now given that depending on the region bank failure can have national security consequences
    • thedougd 4y ago
      From my experience at a regional/super-regional bank, CECL and CCAR were absolutely happening in banks around the 200b mark.
  • beezle 4y ago
    It should not have taken a stress test for the FRBSF or CA State Examiners to see the high risk to solvency a run would create for SVB given the size and state of their HTM portfolio.