>Most derivatives are now centrally cleared, which means centrally reported. SIFIs are held to tight stress testing and reporting standards. Banks have to maint

>Most derivatives are now centrally cleared, which means centrally reported. SIFIs are held to tight stress testing and reporting standards. Banks have to maintain failure plans. That's just off the top of my head. Which is a lower pool of banks, because of rollbacks to Dodd-Frank, which designate a much smaller class of banks as SIFI. In fact, the Federal Reserve pointed the finger at these rollbacks as an important piece of how SVB managed to fail in the first place[0][1] If I understand correctly, being exempted of the SIFI status in practice means that regulators are much more lax in stress testing and enforcement of the tighter Dodd-Frank provisions. When you say failure plans, we are really talking about reserves, there has always been some reserve / loss requirements, they were tighter until the de-regulation of the 80s and 90s, IIRC, and the only thing that has happened there is that some of that same tightness in regulation was restored, but its not net new in the sense that it pushed broader regulation, it only restored some aspects that were actually already in place at prior to the aforementioned de-regulation, IIRC >Most derivatives are now centrally cleared, which means centrally reported I'm unsure if this is meaningful or not, particularly since the conditions that caused LTCM to fail (and really drove much of the 2008 failings) still exist[3] >No, it did not. No competent banking lawyer would allege as much. And you're right. I conflated the role of the Resolution Trust Corporation and the FDIC (at some point, the FDIC was in charge of the RTC I think) which played a similar enough role in my memory that I ended up conflated here. I edited the post to reflect my errors. I should revisit this time period at a later date. > Each of First Republic, SVB and Signature failed due to boring banking mechanisms. That isn't really consensus of multiple agencies. They were negligent in managing their risk[1][2] I don't think that's "boring bank" activity, to be repeatedly mismanaging risks. Unless textbook case of mismanagement by the bank[2] is a boring bank activity. [0]: https://www.reuters.com/business/finance/us-fed-points-finger-trump-era-rollback-svb-demise-2023-04-29/ https://www.reuters.com/business/finance/us-fed-points-finge... [1]: https://www.newyorker.com/news/q-and-a/the-regulatory-breakdown-behind-the-collapse-of-silicon-valley-bank https://www.newyorker.com/news/q-and-a/the-regulatory-breakd... [2]: https://www.federalreserve.gov/publications/files/svb-review-20230428.pdf https://www.federalreserve.gov/publications/files/svb-review... [3]: In my research, Warren Buffett of all folks maintains these risk are alive and well, "a ticking time bomb that will serve to poison markets", to paraphrase. I'm unsure what to make of it (Buffett by his own admission isn't the foremost authority on economics, though its hard to dismiss the guy given the track record) but it is interesting never the less.