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You can chase root causes all the way back to some Roman prelate if you want. But at some point, there was a cause very close to the material problem you’re lo
by swatcoder 4y ago
You can chase root causes all the way back to some Roman prelate if you want.
But at some point, there was a cause very close to the material problem you’re looking at. In this case, that’s the compounded risk that SVB took on in courting a concentrated clientele and trying to balance their books with unusually long-term purchases.
If you step past that and look at the government role, that’s a fine starting point for discussion about systemic issues in our society, but doesn’t absolve SVB of being the most proximate “root cause” of their own problems.
- ramesh31 4y ago>If you step past that and look at the government role, that’s a fine starting point for discussion about systemic issues in our society, but doesn’t absolve SVB of being the most proximate “root cause” of their own problems. I think it's time we stop imagining that financial institutions will ever do anything that they are not legally required to do. This was a failure of regulation. Calling it personal responsibility is about the same as getting mad at the dog for getting into the garbage. It's our fault for not taking out the trash.
- tracker1 4y agoI think the failure, in terms of regulation, is holding accountability in the first place when they violate existing laws and SEC regulations. Not to mention, ever actually holding executives and boards to account in terms of liability against their personal wealth.
- lmm 4y agoIt used to be that the likes of accountants and lawyers weren't allowed to be limited liability corporations - they had to be run as partnerships, with unlimited personal liability. (Sadly, this rule was done away with, and shortly after that we got Enron). Maybe the same should apply to banks.