03-14-2023, 04:35 PM
Acer wrote:
[quote=mattkime]
Which banking regulation was repealed that would have prevented this?
The answer includes politics, the mention of which tends to upset people, so I'll just post this link for off-forum viewing:
https://www.nbcnews.com/politics/congres...-rcna74655
That's a long piece that basically only cites one politician's opinion.
The bill [...] sought to reclassify the "too big to fail" standard, which came with enhanced regulatory scrutiny. By raising the threshold from $50 billion in assets to $250 billion, medium-size banks were exempted from those regulations.
"Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks," [Politician] wrote Monday. "They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit S.V.B., the bank couldn’t withstand the pressure - and Signature's collapse was close behind."
Reading other sources, what played a much bigger role was the Fed's rapid increase in interest rates.