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I 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 insura

by epgui 3y ago

I 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 ago
Any 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.
- epgui 3y ago
  Ah… yes, well I don’t know anything about corporate banking. I was thinking about personal banking practices.
- deleted 3y ago
  [deleted]
- Retric 3y ago
  You can use multiple banking accounts at multiple banks and still maintain FDIC protection. There’s many business models set up to facilitate such things, so while you can’t hold billions in this way in practice it’s not a problem for payroll. Ex: https://en.wikipedia.org/wiki/IntraFi_Network https://en.wikipedia.org/wiki/IntraFi_Network Alternatively, you can also buy your own insurance from a 3rd party to minimize risks. However, you can also get incentivized to ignore the risks and keep large sums at individual institutions. Which has the obvious downsides SVB customers are discovering.
- deleted 3y ago
  [deleted]
- HWR_14 3y ago
  Are many payroll companies doing business out of the Caymans? No. This was investment and private equity firms. They should take their losses.
bhaney 3y ago
They certainly did know better. They're just hoping if they whine loudly enough now, they won't have to deal with the consequences of the risks they knowingly took and would have happily benefitted from without a word.
- citizenkeen 3y ago
  Play capitalism games, win capitalism prizes.
  - omnimus 3y ago
    Play capitalism games, win socialism prizes. Thats what they would like.
    - red-iron-pine 3y ago
      i.e. socialize the losses, capitalize the gains. see also COVID PPP loans
      - epgui 3y ago
        Whatever issues these may have, they are completely irrelevant to the topic or to this thread.
hyevbnff 3y ago
High yield savings accounts give up to 5% atm.
- deleted 3y ago
  [deleted]
- epgui 3y ago
  In inflation-adjusted terms, it’s not that exciting: so do other fixed assets that aren’t you lending a random bank cash, such as US/Canada treasurys / government bonds. The point is that these other instruments don’t have the same risks as lending large amounts of cash to a bank, or even just holding large amounts of cash under your proverbial mattress. If you’re chasing returns, you’ll need to take risks (and you probably won’t be interested in a 5% savings account in this sort of inflationary environment).

by epgui 3y ago

sp332 3y ago

Any 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.

epgui 3y ago
Ah… yes, well I don’t know anything about corporate banking. I was thinking about personal banking practices.
deleted 3y ago
[deleted]
Retric 3y ago
You can use multiple banking accounts at multiple banks and still maintain FDIC protection. There’s many business models set up to facilitate such things, so while you can’t hold billions in this way in practice it’s not a problem for payroll. Ex: https://en.wikipedia.org/wiki/IntraFi_Network https://en.wikipedia.org/wiki/IntraFi_Network Alternatively, you can also buy your own insurance from a 3rd party to minimize risks. However, you can also get incentivized to ignore the risks and keep large sums at individual institutions. Which has the obvious downsides SVB customers are discovering.
deleted 3y ago
[deleted]
HWR_14 3y ago
Are many payroll companies doing business out of the Caymans? No. This was investment and private equity firms. They should take their losses.

bhaney 3y ago

They certainly did know better. They're just hoping if they whine loudly enough now, they won't have to deal with the consequences of the risks they knowingly took and would have happily benefitted from without a word.

citizenkeen 3y ago
Play capitalism games, win capitalism prizes.
- omnimus 3y ago
  Play capitalism games, win socialism prizes. Thats what they would like.
  - red-iron-pine 3y ago
    i.e. socialize the losses, capitalize the gains. see also COVID PPP loans
    - epgui 3y ago
      Whatever issues these may have, they are completely irrelevant to the topic or to this thread.

hyevbnff 3y ago

High yield savings accounts give up to 5% atm.

deleted 3y ago
[deleted]
epgui 3y ago
In inflation-adjusted terms, it’s not that exciting: so do other fixed assets that aren’t you lending a random bank cash, such as US/Canada treasurys / government bonds. The point is that these other instruments don’t have the same risks as lending large amounts of cash to a bank, or even just holding large amounts of cash under your proverbial mattress. If you’re chasing returns, you’ll need to take risks (and you probably won’t be interested in a 5% savings account in this sort of inflationary environment).