Silicon Valley Bank’s collapse & Signature Bank

[Fritz]

how dare you suggest that big business financial can't regulate themselves. !
that's like saying 535 people in DC can't get anything worthwhile done ... other than raising money for wordy causes.

[Carnos Jax]

At this point everything should turn out fine, unless the CPI numbers don't come in good tomorrow (in an inflationary sense). Even then it won't be anything like 2008 or even close.

[Forrest]

I understand why the FDIC protected the deposits of these two banks. But the story isn’t over - there will be investigations and likely new bank regulations created to prevent a recurrence.

[N-OS X-tasy!]

Forrest wrote:
I understand why the FDIC protected the deposits of these two banks. But the story isn’t over - there will be investigations and likely new reestablishment of previously existing bank regulations created to prevent a recurrence.

FTFY.

[mattkime]

Forrest wrote:
I understand why the FDIC protected the deposits of these two banks. But the story isn’t over - there will be investigations and likely new bank regulations created to prevent a recurrence.

They know exactly why it happened. I’m sure some effort will be made to prevent a reoccurrence but it’s currently unclear what form that might take. Transparency contributed to the problem.

[Speedy]

N-OS X-tasy! wrote:
[quote=Forrest]
I understand why the FDIC protected the deposits of these two banks. But the story isn’t over - there will be investigations and likely new reestablishment of previously existing bank regulations created to prevent a recurrence.

FTFY.
This ^^^

[mattkime]

Which banking regulation was repealed that would have prevented this?

[Acer]

mattkime wrote:
Which banking regulation was repealed that would have prevented this?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

[Fritz]

https://www.npr.org/sections/money/2023/...alley-bank

"Peter Thiel's prominent Founders Fund, for example, advised customers to pull deposits out of the bank immediately, adding momentum to a bank run that set off the bank's swift collapse."

back again to be the giant bucket of ....

[M A V I C]

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Which banking regulation was repealed that would have prevented this?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.