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Imagine you’re a business owner. Would you rather bank with Local Community Bank, the failure of which will essentially kill your business, due to haircuts on u

Imagine you’re a business owner. Would you rather bank with Local Community Bank, the failure of which will essentially kill your business, due to haircuts on uninsured deposits that’ll annihilate your working capital, or will you bank with Chase, the failure of which forces government action to cover depositors because the economy is a goner otherwise?

TedDoesntTalk 4y ago
Local Community Bank has free checking and few fees. Does Chase? That’s what they look at, not existential questions about the longevity of the bank.
- brianwawok 4y ago
  Chase charges money to have an account if you are poor. If you have money, and logically could more easily afford to pay bank fees, it’s free. Most of the big guys work like this. At a certain wallet size you get a free personal advisor who will help manage your wealth.
  - TedDoesntTalk 4y ago
    > free personal advisor They take 1% of the money they manage. And then they invest it in their own funds, taking more fees there. They are not free.
    - brianwawok 4y ago
      I mean, duh ;P
rmilk 4y ago
But isn’t your CFO planning for financial risk? Do you have hazard insurance on your leased offices, what happens if one of your key employees is unavailable, a large customer is late on payment, you get hit by supply chain issues, etc. You can’t seriously tell me that the CFO who is responsible for corporate finance at these SVB customers didn’t realize a business checking or savings account is not fully guaranteed? It’s in every single bank brochure and statement. If that’s that case, they need to suffer the consequences of poor contingency planning.
- andrewjl 4y ago
  Most startups don't have a CFO until they reach a certain size. Additionally many startups had covenants in their financing agreements with investors that required keeping funds in SVB so they didn't have a choice.
  - kevinventullo 4y ago
    Sounds like the investors made a poor choice including that in the financing agreement.
  - watwut 4y ago
    Isnt then the whole thing fault of VCs who included those covenant? The same VCs that now cry hardest? Moreover, both startups and VCs are literally the groups that celebrate risk taking and disruption. This is it, this is the flip side of risk, the definition of risk is that you might loose. But somehow, when they loose, due to risk taking, then suddenly they want extra bail outs and help.
watwut 4y ago
This is literally what those small banks lobbied for. Heavily and they won. This is not someone external victimizing small banks.

TedDoesntTalk 4y ago

Local Community Bank has free checking and few fees. Does Chase? That’s what they look at, not existential questions about the longevity of the bank.

brianwawok 4y ago
Chase charges money to have an account if you are poor. If you have money, and logically could more easily afford to pay bank fees, it’s free. Most of the big guys work like this. At a certain wallet size you get a free personal advisor who will help manage your wealth.
- TedDoesntTalk 4y ago
  > free personal advisor They take 1% of the money they manage. And then they invest it in their own funds, taking more fees there. They are not free.
  - brianwawok 4y ago
    I mean, duh ;P

rmilk 4y ago

But isn’t your CFO planning for financial risk? Do you have hazard insurance on your leased offices, what happens if one of your key employees is unavailable, a large customer is late on payment, you get hit by supply chain issues, etc. You can’t seriously tell me that the CFO who is responsible for corporate finance at these SVB customers didn’t realize a business checking or savings account is not fully guaranteed? It’s in every single bank brochure and statement. If that’s that case, they need to suffer the consequences of poor contingency planning.

andrewjl 4y ago
Most startups don't have a CFO until they reach a certain size. Additionally many startups had covenants in their financing agreements with investors that required keeping funds in SVB so they didn't have a choice.
- kevinventullo 4y ago
  Sounds like the investors made a poor choice including that in the financing agreement.
- watwut 4y ago
  Isnt then the whole thing fault of VCs who included those covenant? The same VCs that now cry hardest? Moreover, both startups and VCs are literally the groups that celebrate risk taking and disruption. This is it, this is the flip side of risk, the definition of risk is that you might loose. But somehow, when they loose, due to risk taking, then suddenly they want extra bail outs and help.

watwut 4y ago

This is literally what those small banks lobbied for. Heavily and they won. This is not someone external victimizing small banks.