4 ms·

A good comment on all this... If a bank is complaining about the overhead, effort, cost, complexity of adhering to risk management protocols... they're really

A good comment on all this... If a bank is complaining about the overhead, effort, cost, complexity of adhering to risk management protocols... they're really actually saying "if it wasn't for pesky government, we'd be more than happy to take more risks with -your- money."

yieldcrv 4y ago
there are plenty of pointless poorly thought out protocols that have nothing to do with speculation of customer deposits but do increase operating costs unnecessarily
- mostlysimilar 4y ago
  In a perfect world regulation would be right-sized and not needlessly waste resources, but failing that I'll take "the billionaires make slightly less money but are less likely to crash the economy" over the inverse.
  - Red_Leaves_Flyy 4y ago
    When billionaires get too greedy it’s typically average people who beat the brunt of their responsibility. This is a regressive state of affairs. Banks serving everyday people should not be allowed to make risky bets or engage in transactions that can cause contagion. If that pisses some billionaires off, well thats just the icing on the cake.
- czzr 4y ago
  Could you name one? (Just to help us understand a real example)
  - yieldcrv 4y ago
    The current implementation and purpose of currency transaction reports. These are random documents sent to the government when some transactions over a certain dollar amount are done, ostensibly to help prevent money laundering, in practice just waste everyone’s time. The Government Accountability Office has reported on this for 30 years. GAO reports are full of other examples too.
    - FireBeyond 4y ago
      A lot of HSBC's "interaction" with criminal elements south of the border was detected via analysis of CTRs. And don't most banking systems automatically generate a CTR based on the transaction ledger? It's not like a teller is filling out a form and faxing it.
      - yieldcrv 4y ago
        > And don't most banking systems automatically generate a CTR based on the transaction ledger? It's not like a teller is filling out a form and faxing it. Getting to that point took a very long time. But its not that much more efficient on the FinCEN side. The HSBC thing is also another example of how the rest of AML/KYC is not the best implementation. It is only as strong as its weakest link, while burdening all links in this fairly pointless exercise of whitelisting transactions, instead of tackling the actual regressive behaviors that are illegal.
        FireBeyond 4y ago
        I appreciate your response here - and I agree, it's the regressive behavior and condoning/blind eyes that are the root of the issue.
- dsomers 4y ago
  Okay, name one?
  - yieldcrv 4y ago
    The current implementation and purpose of currency transaction reports
    - quickthrowman 4y ago
      Forcing people to open cash businesses to launder their money creates economic activity, it’s a win-win situation for everyone except the criminal that gets taxed while converting their dirty money to clean money.
- gamblor956 4y ago
  Every "pointless" banking protocol exists because of an actual bank failure.
  - akimball 4y ago
    And this failure is the direct result of those protocols
    - datatrashfire 4y ago
      Care to walk us through that?
  - yieldcrv 4y ago
    you are choosing to think of your worst nightmare. GAO reports are full of examples that have nothing to do with bank failures. Such as some random reports banks are required to file to FinCEN. Just creates an infinite loop of paper nobody ever evaluates. Some mandatory personnel a regulator requires, yet cannot realistic do their adversarial job in an at-will employment world. There’s more.
    - gamblor956 4y ago
      Banks don't file reports with the GAO, which is the internal auditor of the U.S. federal government that audits government financials. FinCEN reports aren't related to bank failures, they're related to money laundering and other financial crimes. FinCEN means "Financial Crimes Enforcement Network." Banks file these reports because a number of financial crimes require the use of bank services. And most agency personnel would outcompete you in an adversarial at-will employment world. They work for the government, for less pay, because they want to, not because they need to.
      - yieldcrv 4y ago
        are you being intentionally dense Yes the internal auditor of the government released reports of failed government policies, how did you read anything else
strawhatguy 4y ago
Large banks do better with more rules, but that's not necessarily the outcome actually desired, or at least I'm tired of the Goldman Sachs running the sector with little to no risk of any challengers. The main problem is that the government is too involved; namely that banks can get Congress/Federal Reserve to bail them out, as we see yet again. It really doesn't matter what rules gov sets, if it's always going to panic and dole out printed money at the slightest hint of hardship (and thus potential incumbent demise), you will get bad behavior, and those involved will do something like this again (plus inflation to boot). If the costs are instead borne by the bank, and depositors of that bank, yes it will suck for many, but also risky investments like the kind SVB engaged in will be shown not to pay off. Depositors will ask many questions on the status of their deposits at other banks, forcing banks to be more transparent/less frivolous with client money. None of which will happen now; the Fed took care of it after all! Maybe we'll get more emotional banking rules implemented, maybe not. Can definitely kicked down the road though, I'll be expecting another such failure in ~15 years time, if that. It's really getting old, and seemingly happening with more frequency regardless of the number of rules implemented.
- ars 4y ago
  You seem to have forgotten that all the shareholders of SVB were wiped out. The government only took care of depositors.
  - strawhatguy 4y ago
    I know, but no action is better, in the long term. As it is, more inflation at least is likely
    - Runways 4y ago
      For who? Maybe SVB has little ordinary banking customers, but what about other banks? Putting ordinary people out on the streets is better for the economy in the long-run? Oh, and now everybody knows when a bank fails they lose their deposits? Better run and get my money out now. Only the little people, with no connections to the decisions, get hurt when a bank fails. All the leadership gets out, no punishment, and maybe even makes a profit.
urbandw311er 4y ago
…but for greater reward though, right?

yieldcrv 4y ago

there are plenty of pointless poorly thought out protocols that have nothing to do with speculation of customer deposits but do increase operating costs unnecessarily

mostlysimilar 4y ago
In a perfect world regulation would be right-sized and not needlessly waste resources, but failing that I'll take "the billionaires make slightly less money but are less likely to crash the economy" over the inverse.
- Red_Leaves_Flyy 4y ago
  When billionaires get too greedy it’s typically average people who beat the brunt of their responsibility. This is a regressive state of affairs. Banks serving everyday people should not be allowed to make risky bets or engage in transactions that can cause contagion. If that pisses some billionaires off, well thats just the icing on the cake.
czzr 4y ago
Could you name one? (Just to help us understand a real example)
- yieldcrv 4y ago
  The current implementation and purpose of currency transaction reports. These are random documents sent to the government when some transactions over a certain dollar amount are done, ostensibly to help prevent money laundering, in practice just waste everyone’s time. The Government Accountability Office has reported on this for 30 years. GAO reports are full of other examples too.
  - FireBeyond 4y ago
    A lot of HSBC's "interaction" with criminal elements south of the border was detected via analysis of CTRs. And don't most banking systems automatically generate a CTR based on the transaction ledger? It's not like a teller is filling out a form and faxing it.
    - yieldcrv 4y ago
      > And don't most banking systems automatically generate a CTR based on the transaction ledger? It's not like a teller is filling out a form and faxing it. Getting to that point took a very long time. But its not that much more efficient on the FinCEN side. The HSBC thing is also another example of how the rest of AML/KYC is not the best implementation. It is only as strong as its weakest link, while burdening all links in this fairly pointless exercise of whitelisting transactions, instead of tackling the actual regressive behaviors that are illegal.
      - FireBeyond 4y ago
        I appreciate your response here - and I agree, it's the regressive behavior and condoning/blind eyes that are the root of the issue.
dsomers 4y ago
Okay, name one?
- yieldcrv 4y ago
  The current implementation and purpose of currency transaction reports
  - quickthrowman 4y ago
    Forcing people to open cash businesses to launder their money creates economic activity, it’s a win-win situation for everyone except the criminal that gets taxed while converting their dirty money to clean money.
gamblor956 4y ago
Every "pointless" banking protocol exists because of an actual bank failure.
- akimball 4y ago
  And this failure is the direct result of those protocols
  - datatrashfire 4y ago
    Care to walk us through that?
- yieldcrv 4y ago
  you are choosing to think of your worst nightmare. GAO reports are full of examples that have nothing to do with bank failures. Such as some random reports banks are required to file to FinCEN. Just creates an infinite loop of paper nobody ever evaluates. Some mandatory personnel a regulator requires, yet cannot realistic do their adversarial job in an at-will employment world. There’s more.
  - gamblor956 4y ago
    Banks don't file reports with the GAO, which is the internal auditor of the U.S. federal government that audits government financials. FinCEN reports aren't related to bank failures, they're related to money laundering and other financial crimes. FinCEN means "Financial Crimes Enforcement Network." Banks file these reports because a number of financial crimes require the use of bank services. And most agency personnel would outcompete you in an adversarial at-will employment world. They work for the government, for less pay, because they want to, not because they need to.
    - yieldcrv 4y ago
      are you being intentionally dense Yes the internal auditor of the government released reports of failed government policies, how did you read anything else

strawhatguy 4y ago

Large banks do better with more rules, but that's not necessarily the outcome actually desired, or at least I'm tired of the Goldman Sachs running the sector with little to no risk of any challengers. The main problem is that the government is too involved; namely that banks can get Congress/Federal Reserve to bail them out, as we see yet again. It really doesn't matter what rules gov sets, if it's always going to panic and dole out printed money at the slightest hint of hardship (and thus potential incumbent demise), you will get bad behavior, and those involved will do something like this again (plus inflation to boot). If the costs are instead borne by the bank, and depositors of that bank, yes it will suck for many, but also risky investments like the kind SVB engaged in will be shown not to pay off. Depositors will ask many questions on the status of their deposits at other banks, forcing banks to be more transparent/less frivolous with client money. None of which will happen now; the Fed took care of it after all! Maybe we'll get more emotional banking rules implemented, maybe not. Can definitely kicked down the road though, I'll be expecting another such failure in ~15 years time, if that. It's really getting old, and seemingly happening with more frequency regardless of the number of rules implemented.

ars 4y ago
You seem to have forgotten that all the shareholders of SVB were wiped out. The government only took care of depositors.
- strawhatguy 4y ago
  I know, but no action is better, in the long term. As it is, more inflation at least is likely
  - Runways 4y ago
    For who? Maybe SVB has little ordinary banking customers, but what about other banks? Putting ordinary people out on the streets is better for the economy in the long-run? Oh, and now everybody knows when a bank fails they lose their deposits? Better run and get my money out now. Only the little people, with no connections to the decisions, get hurt when a bank fails. All the leadership gets out, no punishment, and maybe even makes a profit.

urbandw311er 4y ago

…but for greater reward though, right?