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I think this is the inevitable result of relaxing glass-steagall. The costs of shutting down the first line of failures will make the second line of failures.

I think this is the inevitable result of relaxing glass-steagall. The costs of shutting down the first line of failures will make the second line of failures. Naturally bank shareholders should lose everything before tax payers and the last thing we should do is stop the destruction of an industry caused by its own lobbying. Its brokerage accounts for everyone..

donmcronald 3y ago
Claw back the personal wealth of the executives when banks and hedge funds fail. It'll never happen though. They have too much political power. The Vice documentary about the 2008 financial crisis has some interesting tidbits. They talk about how the global banking system is at risk of collapse in one part while another part says any deals that take away executive bonuses would be rejected. Let that sink in. The US, with the most powerful government in the world, couldn't even take away executive bonuses to sell the public on a bailout plan that would save the banking system. It's crazy.
- JumpCrisscross 3y ago
  > US, with the most powerful government in the world, couldn't even take away executive bonuses to sell the public on a bailout plan that would save the banking system Absent legislation, the United States can’t retroactively break private contracts. The proper thing to do, what we’ve done in the recent bank failures, is to break the bank that wrote those contracts.
  - donmcronald 3y ago
    Think of it in reverse then. The banking executive, who already have hundreds of millions or billions of dollars in personal wealth, weren't willing to give up one year of bonuses to save their industry.
    - JumpCrisscross 3y ago
      > banking executive, who already have hundreds of millions or billions of dollars in personal wealth, weren't willing to give up one year of bonuses to save their industry Well, they didn't need to. That was the problem. We've since fixed it by requiring clawbacks and improving the ability for the FDIC to e.g. put SVB into receivership.
  - kelnos 3y ago
    > Absent legislation... So write that legislation! The fact that such legislation in the wake of 2008 was so politically unpopular speaks volumes.
JumpCrisscross 3y ago
> this is the inevitable result of relaxing glass-steagall SVB’s failure had nothing to do with Glass-Steagall. They had no investment bank to speak of.

donmcronald 3y ago

Claw back the personal wealth of the executives when banks and hedge funds fail. It'll never happen though. They have too much political power. The Vice documentary about the 2008 financial crisis has some interesting tidbits. They talk about how the global banking system is at risk of collapse in one part while another part says any deals that take away executive bonuses would be rejected. Let that sink in. The US, with the most powerful government in the world, couldn't even take away executive bonuses to sell the public on a bailout plan that would save the banking system. It's crazy.

JumpCrisscross 3y ago
> US, with the most powerful government in the world, couldn't even take away executive bonuses to sell the public on a bailout plan that would save the banking system Absent legislation, the United States can’t retroactively break private contracts. The proper thing to do, what we’ve done in the recent bank failures, is to break the bank that wrote those contracts.
- donmcronald 3y ago
  Think of it in reverse then. The banking executive, who already have hundreds of millions or billions of dollars in personal wealth, weren't willing to give up one year of bonuses to save their industry.
  - JumpCrisscross 3y ago
    > banking executive, who already have hundreds of millions or billions of dollars in personal wealth, weren't willing to give up one year of bonuses to save their industry Well, they didn't need to. That was the problem. We've since fixed it by requiring clawbacks and improving the ability for the FDIC to e.g. put SVB into receivership.
- kelnos 3y ago
  > Absent legislation... So write that legislation! The fact that such legislation in the wake of 2008 was so politically unpopular speaks volumes.

JumpCrisscross 3y ago

> this is the inevitable result of relaxing glass-steagall SVB’s failure had nothing to do with Glass-Steagall. They had no investment bank to speak of.