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But this is a narrow interest so that depositors at least have access to their money. It does not reward the bank. So long as the bank isn't rewarded, it shou
by starkd 4y ago
But this is a narrow interest so that depositors at least have access to their money. It does not reward the bank. So long as the bank isn't rewarded, it should be a caution flag for the other banks to take risk management more seriously. Startups have to also have to get their burn rate under control or go out of business.
- nerdponx 4y agoI think the argument here is that the SVB execs were "in bed" (so to speak) with the VCs who were pushing their companies to deposit at SVB, and the now-fired execs still have their recent bonus payouts. So the punishment is not spread out far enough to discourage moral hazard and future systemically-risky gambling with millions of dollars of other people's money. I'm not sure the same argument applies for the other bank(s) with huge MBS investments with lower yields than equivalent Treasury bonds. I don't know enough about those casees.