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Empirically, banks which get involved with crypto tend to blow up: https://www.bitsaboutmoney.com/archive/debanking-and-debunking/ https://www.bitsaboutmoney.co
by tetromino_ 2y ago
Empirically, banks which get involved with crypto tend to blow up: https://www.bitsaboutmoney.com/archive/debanking-and-debunking/ https://www.bitsaboutmoney.com/archive/debanking-and-debunki...
How should one keep track of whether one's banks have non-negligible crypto exposure, so that one may move one's money to safer institutions well in advance of the inevitable disaster?
- Analemma_ 2y ago[flagged]
- Lerc 2y agoEmpirically, a lot of early ventures into any area tend to blow up. The first people to try are, almost by definition, the risk takers. That is not to say they all blow up, or even that the ones that blow up do so because of this particular venture. Just high risk taking is correlated with both blowing up and trying the new thing first. They may blow up from some completely unrelated risky venture.
- roughly 2y agoEmpirically, a lot of people who go to casinos also go bust.
- phkahler 2y agoStatistically everyone who goes to casinos for a long time loses.
- bluGill 2y agoAll the casino employees win despite going for a long time. Even when they lose they win - my cousin repairs slot machines, at the end of every shift he gets paid to lose the last of his test budget.
- int0x29 2y agoMost of those people aren't gambling with other people's money that they have a fiduciary obligation with.
- Lerc 2y agoYes, but you can't then say that they went bust because they went to the Bellagio.
- mmooss 2y agoRegulated banks are designed specifically not to blow up, because they take the money of innocents, of taxpayers, and the rest of the economy with them. That was a cause of the Great Depression, the 'Great Recession' of 2008, and many similar negative events. That's why the US created the Federal Reserve, deposit insurance (FDIC), and bank regulation - to prevent those things. > They may blow up from some completely unrelated risky venture. That's not the case with regulated banks.
- TeeMassive 2y agoHalf of the Great Depression was caused by tariffs.
- UncleOxidant 2y agoAnd the other half was unregulated banks?
- hcknwscommenter 2y agoThere were massive bank failures during the great depression. And, no FDIC type insurance. So depositors entirely wiped out. So conservative families, not speculating in the stock market or otherwise and "safely" saving their money in banks were simply wiped out. Stock investors also wiped out due to equity market downturn. Farmers wiped out due to food/commodity prices dropping. Every single asset class took its turn. Job losses quickly followed and then fed back on the stuff above to cause even more mayhem. There is no doubt that things like bank regulation and FDIC insurance made a massive difference and at least partly kept the great recession from becoming like the great depression.
- ty6853 2y agoFDIC would have solved the issue of contracting money supply, but the more direct cause was the federal reserve contracting money supply in the first place assuring bank failures in a fractional reserve system. FDIC is a bandaid for having a centrally planned fed rather than free market banking with private deposit insurance.
- thegreatpeter 2y agoEvery bank will get involved in crypto if they haven’t already
- Retric 2y agoMost banks specialize quite a bit, they aren’t going to jump in unless crypto gets 100x as large as it is now and the growth just isn’t there.
- hx8 2y agoI remember when the entire point of crypto was to avoid banks
- UncleOxidant 2y agoAnd now the crypto is going to be in the banks.
- 8note 2y agodesign wise, crypto looks most like banks being wallets and blockchains being a way for banks to agree on interbank transfers
- nwah1 2y agoBanks like to be able to reverse transactions. As do courts.
- MacsHeadroom 2y agoBanks mostly deal in stablecoin which tend to be reversible, freezable, etc by court order since they're permissioned not permissionless.
- nwah1 2y agoBut in that case you just have a really inefficient database, and the entire point of the Rube Goldberg apparatus is gone. You don't need to solve the Byzantine Generals problem with a trustless system when you are trusting someone.
- dist-epoch 2y agoEmpirically, banks which get involved in any kind of financial activity tend to blow up: lending money, mortgages, forex trading, interest rate trading, ...
- mmooss 2y agoIt's the opposite. Regulated banks do not blow up - that's the point of regulation, to prevent those disasters. See my comment in this same subthread: https://news.ycombinator.com/item?id=43510850 https://news.ycombinator.com/item?id=43510850
- sleepybrett 2y agono, the blow up and then the american taxpayer foots the bill for picking up the pieces.
- mmooss 2y agoCould you give some examples?
- sleepybrett 2y agoAn example of bank bailouts? jesus man, pay some attention: https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008 https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...
- mmooss 2y agoThat was 2008, which was an extraordinary event - many say it was the worst economic crisis since the Great Depression. People are claiming bank bailouts are regular events - are there recent ones?
- dist-epoch 2y agoRegulated banks don't blow up because the gov bails them out every time.
- kylehotchkiss 2y agoMy spider sense tells me Wells Fargo will be one of the first to go all in, they've generally been an org that makes solid, future-focused decisions right?
- UncleOxidant 2y agoCan we get some kind of "Crypto Free" label/certification on banks and credit unions that don't engage in crypto activities?
- tim333 2y agoI don't know about labels but if you call most banks and say do you accept money paid in from crypto transactions in my experience they'll say no thanks. It's getting quite hard to find ones that will touch it due to money laundering regulations / risks.
- kasey_junk 2y agohttps://cdr.ffiec.gov/public/ManageFacsimiles.aspx https://cdr.ffiec.gov/public/ManageFacsimiles.aspx The fdic “call reports” are the ones you want. They have bulk download but it’s been ages since I looked at the format.
- cyanydeez 2y agohow long until this report is made efficient by removal?
- koolba 2y agoThis is what a proper balance sheet is supposed to address. It’s fine to have different tiers of assets and liabilities as long as the net capitalization requirements for the parts are valid.