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SVB customers who lost their deposits remain on the hook for loans
- CaliforniaKarl 3y agohttps://archive.is/1d4uw https://archive.is/1d4uw
- sedatk 3y agoERR_SSL_VERSION_OR_CIPHER_MISMATCH
- MallocVoidstar 3y agoarchive.is is poisoning results to users of Cloudflare DNS again. You can look up its IP (via e.g. 8.8.8.8) and hardcode it locally for their domains to fix it.
- sedatk 3y agoWeird, thanks!
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- rekttrader 3y agoI was wondering the same thing, my router was set to cloudflair and archive would only work when on mobile... wondered why, thanks for the troubleshooting.
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- MallocVoidstar 3y agoThey run their own DNS and if a request comes from Cloudflare's servers return garbage.
- kccqzy 3y agoThey require EDNS client subnet which is not supported by Cloudflare. Cloudflare's decision not to support it and the resultant breakage are mentioned in the Wikipedia article. https://en.wikipedia.org/wiki/EDNS_Client_Subnet https://en.wikipedia.org/wiki/EDNS_Client_Subnet
- scheme271 3y agoArchive.is requests EDNS information about the subnet that your system is on. Cloudflare doesn't pass this information along since it can be used to determine your location in part. So when archive.is doesn't get the subnet info, it sends bogus dns results back and you get that error. See https://jarv.is/notes/cloudflare-dns-archive-is-blocked/ https://jarv.is/notes/cloudflare-dns-archive-is-blocked/ for all the details.
- altairprime 3y agoarchive.is actively blocks a selection of requests that do not provide them correct and valid location data; that error indicates that, for whatever reason, your request was blocked. Mine was as well, until I switched to curl; I am not using 1.1.1.1 DNS, but that's their most frequent issue. See also, for example: https://twitter.com/archiveis/status/1018691421182791680?s=20 https://twitter.com/archiveis/status/1018691421182791680?s=2...
- shagie 3y agoUnlocked version of the article for any having difficulty with archive.is https://www.wsj.com/articles/svb-customers-who-lost-their-deposits-remain-on-the-hook-for-loans-5df7963b?st=j9edmk52qticutv&reflink=desktopwebshare_permalink https://www.wsj.com/articles/svb-customers-who-lost-their-de...
- CaliforniaKarl 3y agoRelated article: The Pain of Silicon Valley Bank’s Collapse Is Being Felt by These Depositors: Customers that banked at SVB’s Cayman Islands branch have had their funds seized by the FDIC https://www.wsj.com/articles/the-pain-of-silicon-valley-banks-collapse-is-being-felt-by-these-depositors-f18c0bd4 https://www.wsj.com/articles/the-pain-of-silicon-valley-bank... (https://archive.is/Gzj06 https://archive.is/Gzj06) Posted back in May at https://news.ycombinator.com/item?id=35932002 https://news.ycombinator.com/item?id=35932002 and https://news.ycombinator.com/item?id=35968213 https://news.ycombinator.com/item?id=35968213 but not discussed.
- Simulacra 3y agoIs it normal for loans to be wiped clean in a bank failure?
- PeterisP 3y agoNo, definitely not, they are the key source of funds for creditors of the bank.
- darkteflon 3y agoWhich group includes, ironically, its depositors.
- kristopolous 3y agoIf I go bankrupt and get protected from my debts, that doesn't mean others who are in debt to me also get protected.
- itake 3y agono, those debts will be used to pay off the people the bank owes money to (the depositors).
- papercrane 3y agoLoans are an asset on the banks balance sheet and can be sold like any other asset.
- khuey 3y agoLive by the sword, die by the sword as far as doing business in regulation-free tax havens goes, I guess?
- deleted 3y ago[deleted]
- alphanullmeric 3y agoSounds like we agree that living by the sword should be allowed correct? Or do you still intend on making it illegal for others to do what they want with their own money even if you wouldn’t be on the hook for their losses?
- mdasen 3y agoThis article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay into the FDIC insurance fund so they shouldn't be given the protection of the FDIC. The title of the article makes it sound like some poor SVB "customers" are in a bad situation. The truth is that it's going to be venture capital, private equity, and some really wealthy individuals (who were probably trying to dodge taxes). It's hard to feel bad for extremely rich people using a well-known tax haven losing some money. The WSJ is really burying the lead in this story. If you're trying to avoid US laws, regulations, and taxes, you can't come looking for US protections. EDIT: In a previous article on the topic, the WSJ noted "The financial pain being felt by SVB’s foreign depositors could make investment firms that are incorporated or doing business in offshore financial hubs reconsider where they should put their money and what protections they have" https://www.wsj.com/articles/cayman-islands-regulator-exploring-legal-options-after-fdic-seized-svb-deposits-b00704ae https://www.wsj.com/articles/cayman-islands-regulator-explor... We don't want to incentivize people to dodge taxes while thinking they'll enjoy all the protections paid for by taxes.
- epgui 3y agoI don’t know if it’s just me that’s heartless, but I think if you’re financially sophisticated enough to bank in other countries or to have more than the insurable limit held in cash (!!! why???) then you ought to have known better or to have known the risks. I never have more than a small amount held in cash, and even if I had a crazy windfall and made some billions, I wouldn’t keep more than a small amount in cash. For the patient folks, there’s equities… For the risk averse, there’s money markets, treasurys, real estate, etc.
- sp332 3y agoAny company with more than a couple dozen employees is going to have more than $250k in the bank for payday. SVB had some payroll processing companies as clients, so they each had multiple companies' payroll in the accounts that Friday. And the article mentions that the Cayman Islands branch had investment and private equity firms as clients, so they wouldn't get too far with only $250k in their accounts.
- JCM9 3y agoThese are folks that were trying to avoid US regulations and taxes via offshore accounts. But if you do that you also don’t get the protections that come with having a US bank account… like not losing your money. They got burned and are now crying. Most folks aren’t losing sleep over this.
- zeruch 3y agoGood. Reap what you sow.
- DwayneSamuels 3y agodang
- rahimnathwani 3y agoAIUI if the loans and deposits had been with the same legal entity, any outstanding loan amount would be offset by the deposit balance. But in this case, SVB used two different entities: one for loan accounts, and another for Cayman-based deposits. Whilst this seems correct, it's also unintuitive. I guess many people here have both a mortgage and a savings account that they got from the same bank. Imagine you just had some sort of windfall (bonus, bequest, whatever) and your checking account temporarily had more than the FDIC limit. But then the bank collapsed, and some of your deposit is uninsured. No problem, you think, because you owe the bank more than that on your mortgage. But then you find out that your mortgage loan was sold soon after the bank originated it, so you mortgage is with a different entity. Now, under FDIC rules, your uninsured deposits cannot be used to offset your outstanding mortgage.
- HWR_14 3y agoSVB had two entities (or more). A US one and a Cayman one. You could deposit money in the US one (and people did, those people are fine) but then you were subject to US rules and taxes. So some people borrowed money in the US, but kept their money in the Caymans. This was not some random happenstance where something outside their control caused cashflow issues causing them to lose money[0]. This was a conscious decision with risks. I hope these people are not made whole. [0] In practice, while not obligated to do so, the FDIC has always repaid people 100% in the situation you described.
- SilverBirch 3y ago>Those investment firms were stunned in late March when they found out their deposits weren’t protected, and the FDIC—acting as SVB’s receiver—had drained their bank accounts, The Wall Street Journal reported previously. I don't really understand the reporting here. Really? The investment firms with funds in a tax haven were 'stunned' when they found out their deposits weren't protected? That doesn't sound credible to me. They're bloody investment firms! Figuring out how to manage money is literally their job, it's not credible to turn around and go "Gee, I'm just a simple guy trying to pay for groceries, I don't understand this complex banking stuff". Why write an article like this - other than you've been in contact with someone looking for a sympathetic write up to pressure regulators. If they really are this stupid - and I don't believe they are - get a list of their names and send the IRS after them because there's no way they successfully structured their companies to dodge the tax.
- itairall 3y agoIt is an obvious propaganda piece but the average person believes whatever they read so why not? These people are the opposite of stupid when it comes to money. Cunning, ruthless, underhanded, obsessed, win at all cost, win even at the expense of your own grandkids. When we have no culture though beyond sports, video games and a wealth creation, net worth game, it is hard to imagine this not happening.
- throwaway173738 3y agoPresumably the assets from the loan still exist? If those were somehow deposited in SVB there might be a case. But if you buy a house with a mortgage and then a bank run wipes out your lender, you still own the house and could conceivably sell it to cover the cost of the loan. Frankly if you’re sophisticated enough to bank in multiple countries I would think you’d know that.