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Yes the system is working and the FDIC did its job. The second largest bank failure (by inflation adjusted assets) in US history is still news.

bwb 3y ago
why? IE, why does this matter for HN in your opinion? generally curious as it seems like a non issue Adjusted for inflation is this in the top 10 versus the 80s?
- DonsDiscountGas 3y ago
  Well maybe you're not interested in it so downvote away. Like many people I'm at least mildly interested in news that affects a lot of people, even if it doesn't affect me personally today. According to wikipedia, second largest by assets: https://en.wikipedia.org/wiki/List_of_largest_bank_failures_in_the_United_States https://en.wikipedia.org/wiki/List_of_largest_bank_failures_... I haven't researched this thoroughly, but I think the banking sector (like many other sectors) has been concentrating a lot over the years. So in the 80s we had many small bank failures, and in 2008-2010 we had many many small+medium bank failures (+WaMu, the largest in US history), and today we have a few large bank failures (so far).
  - bwb 3y ago
    I didn't downvote :); that is others, I guess. Right, but the concentration isn't a bad thing just because it is concentrated. It might just be a reflection of the changing nature of the world (globalization, finance changes, etc). I checked, and currently, there are 4,844 banks in the USA. There are also 4,759 credit unions, but I am not sure if that is also included in the bank numbers.
- gonzo41 3y ago
  A tight credit market affects valley companies. If there's a liquidity squeeze/crisis then startups may have to face real world challenges like actually making money.
  - bwb 3y ago
    Gotcha, makes sense :)
vxNsr 3y ago
Failure isn’t the system working as normal. The regulators supposedly in charge totally failed here.
- bwb 3y ago
  How? They did perfectly. The bank failed to manage risk. And consumers fled.
  - vxNsr 3y ago
    If you ask yourself why the banks were buying what most people would consider the least risky asset ever and somehow ended up failing you’d understand why this was really a failure of regulation and not cowboys avoiding responsibility
    - bwb 3y ago
      I just don't think you understand the banking industry... they failed to manage the change in interest yields and lost consumer confidence. The SVB report is damning in terms of poor management and excessive risk-taking that then back fired when the interest rate environment changed. The FED created this environment and did it for a good reason to head off inflation. Did you want the FED to not slow/stop inflation?
      - vxNsr 3y ago
        You’re saying the fed intentionally created an environment in which only big banks could survive and that’s a good thing?
        bwb 3y ago
        It is only affecting badly run banks it looks like. And yes, their mandate is heavily fighting inflation. There are 4,000+ banks in the USA. Seems ok. Congress can also pass better laws to max size banks if they are concerned.

bwb 3y ago

why? IE, why does this matter for HN in your opinion? generally curious as it seems like a non issue Adjusted for inflation is this in the top 10 versus the 80s?

DonsDiscountGas 3y ago
Well maybe you're not interested in it so downvote away. Like many people I'm at least mildly interested in news that affects a lot of people, even if it doesn't affect me personally today. According to wikipedia, second largest by assets: https://en.wikipedia.org/wiki/List_of_largest_bank_failures_in_the_United_States https://en.wikipedia.org/wiki/List_of_largest_bank_failures_... I haven't researched this thoroughly, but I think the banking sector (like many other sectors) has been concentrating a lot over the years. So in the 80s we had many small bank failures, and in 2008-2010 we had many many small+medium bank failures (+WaMu, the largest in US history), and today we have a few large bank failures (so far).
- bwb 3y ago
  I didn't downvote :); that is others, I guess. Right, but the concentration isn't a bad thing just because it is concentrated. It might just be a reflection of the changing nature of the world (globalization, finance changes, etc). I checked, and currently, there are 4,844 banks in the USA. There are also 4,759 credit unions, but I am not sure if that is also included in the bank numbers.
gonzo41 3y ago
A tight credit market affects valley companies. If there's a liquidity squeeze/crisis then startups may have to face real world challenges like actually making money.
- bwb 3y ago
  Gotcha, makes sense :)

vxNsr 3y ago

Failure isn’t the system working as normal. The regulators supposedly in charge totally failed here.

bwb 3y ago
How? They did perfectly. The bank failed to manage risk. And consumers fled.
- vxNsr 3y ago
  If you ask yourself why the banks were buying what most people would consider the least risky asset ever and somehow ended up failing you’d understand why this was really a failure of regulation and not cowboys avoiding responsibility
  - bwb 3y ago
    I just don't think you understand the banking industry... they failed to manage the change in interest yields and lost consumer confidence. The SVB report is damning in terms of poor management and excessive risk-taking that then back fired when the interest rate environment changed. The FED created this environment and did it for a good reason to head off inflation. Did you want the FED to not slow/stop inflation?
    - vxNsr 3y ago
      You’re saying the fed intentionally created an environment in which only big banks could survive and that’s a good thing?
      - bwb 3y ago
        It is only affecting badly run banks it looks like. And yes, their mandate is heavily fighting inflation. There are 4,000+ banks in the USA. Seems ok. Congress can also pass better laws to max size banks if they are concerned.