Anonymous
03/20/2023 17:26
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:You know for those shouting more regulation, regulators can always ignore what they regulate.
Remember Sheila Bair before Indymac Bank went poof?
Remember the SEC browsing porn all day and ignoring the Bernie Madoff debacle?
Congressional democrats and Franklin Raines telling everyone there is no problem before the subprime mortgage crisis of 2008?
Wachovia? Lehman? The S&L crisis and how congress played dumb with the Keating Five?
Banks are subject to thousands of Federal Register pages of regulation. Wouldn't be surprised if it is tens of thousands. It is not hard to see how the basics of running a bank well could be missed given the massive amount of potential compliance pitfalls.
Most of the regulations are simple requirements to make sure they have sufficient reserves, don’t have them in excessively risky investments, and don’t defraud their shareholders or customers. Regulations did not cause this. The bankers and the VCs did this to themselves.
You are clearly not a banking lawyer. There is nothing simple about the complex of rules they are subject to and they are rife with conflicting incentives. And there is an entire separate body of consumer regulations, and AML/CFT requirements.
Anonymous
03/20/2023 17:11
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:You know for those shouting more regulation, regulators can always ignore what they regulate.
Remember Sheila Bair before Indymac Bank went poof?
Remember the SEC browsing porn all day and ignoring the Bernie Madoff debacle?
Congressional democrats and Franklin Raines telling everyone there is no problem before the subprime mortgage crisis of 2008?
Wachovia? Lehman? The S&L crisis and how congress played dumb with the Keating Five?
Banks are subject to thousands of Federal Register pages of regulation. Wouldn't be surprised if it is tens of thousands. It is not hard to see how the basics of running a bank well could be missed given the massive amount of potential compliance pitfalls.
Most of the regulations are simple requirements to make sure they have sufficient reserves, don’t have them in excessively risky investments, and don’t defraud their shareholders or customers. Regulations did not cause this. The bankers and the VCs did this to themselves.
Anonymous
03/20/2023 17:04
Subject: SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:We should have done with Iceland did in '08. Let the banks fail, bail out the consumers, and prosecute the bankers.
This is a lot easier in a country with less than 400,000 people.
+1 Also, most of the country is uninhabited, and it has restrictive immigration policies.
And has a robust fishing industry
Plus cheap thermal energy.
The Icelandic crisis was due to “hot money” deposit flows, similar to SVB. UK citizens were putting their deposits in Icelandic banks, which paid significantly higher rates of interest than banks in the UK. When the financial crisis happened, UK and other foreign depositors quickly withdrew their money from Icelandic banks and those banks had to try to try to sell long dated mortgage backed securities that were suddenly worth a lot less than their par value.
It’s a similar situation as SVB - it was a liquidity issue that led to bank run.
The proximate cause of almost every bank failure is lack of liquidity. (Barings come to mind as a large exception.) The story of why liquidity dried up at particular failed banks varies.
SVB suffered from a uniquely narrow set of depositors, their fickle behavior is the proximate liquidity issues.
Anonymous
03/20/2023 17:02
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:You know for those shouting more regulation, regulators can always ignore what they regulate.
Remember Sheila Bair before Indymac Bank went poof?
Remember the SEC browsing porn all day and ignoring the Bernie Madoff debacle?
Congressional democrats and Franklin Raines telling everyone there is no problem before the subprime mortgage crisis of 2008?
Wachovia? Lehman? The S&L crisis and how congress played dumb with the Keating Five?
Banks are subject to thousands of Federal Register pages of regulation. Wouldn't be surprised if it is tens of thousands. It is not hard to see how the basics of running a bank well could be missed given the massive amount of potential compliance pitfalls.
PP is just making up excuses for bad behavior. There’s endless deliberate attempts to game banking regulations, it’s not a question of just missing things.
Anonymous
03/20/2023 15:28
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Wow Iceland has about the same population as Cleveland, OH.
Yep, and not very diverse.
What does any of this have to do with banking failure? Nothing. Meanwhile aside from all of the irrelevant navelgazing, I think we need to shit or get off the pot. Either let poorly run banks fail and hold their execs responsible, or serioiusly step up oversight, regulation and enforcement. None of these talking points changes any of that, whatsoever.
Anonymous
03/20/2023 12:21
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Wow Iceland has about the same population as Cleveland, OH.
Yep, and not very diverse.
Anonymous
03/19/2023 18:38
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Wow Iceland has about the same population as Cleveland, OH.
Anonymous
03/19/2023 16:53
Subject: SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:We should have done with Iceland did in '08. Let the banks fail, bail out the consumers, and prosecute the bankers.
This is a lot easier in a country with less than 400,000 people.
+1 Also, most of the country is uninhabited, and it has restrictive immigration policies.
And has a robust fishing industry
Plus cheap thermal energy.
The Icelandic crisis was due to “hot money” deposit flows, similar to SVB. UK citizens were putting their deposits in Icelandic banks, which paid significantly higher rates of interest than banks in the UK. When the financial crisis happened, UK and other foreign depositors quickly withdrew their money from Icelandic banks and those banks had to try to try to sell long dated mortgage backed securities that were suddenly worth a lot less than their par value.
It’s a similar situation as SVB - it was a liquidity issue that led to bank run.
The proximate cause of almost every bank failure is lack of liquidity. (Barings come to mind as a large exception.) The story of why liquidity dried up at particular failed banks varies.
Anonymous
03/19/2023 16:45
Subject: SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:We should have done with Iceland did in '08. Let the banks fail, bail out the consumers, and prosecute the bankers.
This is a lot easier in a country with less than 400,000 people.
+1 Also, most of the country is uninhabited, and it has restrictive immigration policies.
And has a robust fishing industry
Plus cheap thermal energy.
The Icelandic crisis was due to “hot money” deposit flows, similar to SVB. UK citizens were putting their deposits in Icelandic banks, which paid significantly higher rates of interest than banks in the UK. When the financial crisis happened, UK and other foreign depositors quickly withdrew their money from Icelandic banks and those banks had to try to try to sell long dated mortgage backed securities that were suddenly worth a lot less than their par value.
It’s a similar situation as SVB - it was a liquidity issue that led to bank run.
It’s *somewhat* similar, especially in that Icelandic banks were also laughably badly managed and very much the product of too-rapid, low-interest rate fueled growth. But SVB, more like Anglo-Irish, created conditions for a bank run by being overly dependent on just a few players for deposits, even if they could pretend that their portfolio companies were OPM and not just more than a handful of people’s wealth in an additional account.
Anonymous
03/19/2023 14:31
Subject: SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:We should have done with Iceland did in '08. Let the banks fail, bail out the consumers, and prosecute the bankers.
This is a lot easier in a country with less than 400,000 people.
+1 Also, most of the country is uninhabited, and it has restrictive immigration policies.
And has a robust fishing industry
Plus cheap thermal energy.
The Icelandic crisis was due to “hot money” deposit flows, similar to SVB. UK citizens were putting their deposits in Icelandic banks, which paid significantly higher rates of interest than banks in the UK. When the financial crisis happened, UK and other foreign depositors quickly withdrew their money from Icelandic banks and those banks had to try to try to sell long dated mortgage backed securities that were suddenly worth a lot less than their par value.
It’s a similar situation as SVB - it was a liquidity issue that led to bank run.
Anonymous
03/19/2023 14:10
Subject: SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:We should have done with Iceland did in '08. Let the banks fail, bail out the consumers, and prosecute the bankers.
This is a lot easier in a country with less than 400,000 people.
+1 Also, most of the country is uninhabited, and it has restrictive immigration policies.
And has a robust fishing industry
Plus cheap thermal energy.
Anonymous
03/19/2023 14:09
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:You know for those shouting more regulation, regulators can always ignore what they regulate.
Remember Sheila Bair before Indymac Bank went poof?
Remember the SEC browsing porn all day and ignoring the Bernie Madoff debacle?
Congressional democrats and Franklin Raines telling everyone there is no problem before the subprime mortgage crisis of 2008?
Wachovia? Lehman? The S&L crisis and how congress played dumb with the Keating Five?
Banks are subject to thousands of Federal Register pages of regulation. Wouldn't be surprised if it is tens of thousands. It is not hard to see how the basics of running a bank well could be missed given the massive amount of potential compliance pitfalls.
Anonymous
03/19/2023 13:09
Subject: Re:SVB Bank Run: Fed Calling Emergency Meeting
You know for those shouting more regulation, regulators can always ignore what they regulate.
Remember Sheila Bair before Indymac Bank went poof?
Remember the SEC browsing porn all day and ignoring the Bernie Madoff debacle?
Congressional democrats and Franklin Raines telling everyone there is no problem before the subprime mortgage crisis of 2008?
Wachovia? Lehman? The S&L crisis and how congress played dumb with the Keating Five?
Remember Sheila Bair before Indymac Bank went poof?
Remember the SEC browsing porn all day and ignoring the Bernie Madoff debacle?
Congressional democrats and Franklin Raines telling everyone there is no problem before the subprime mortgage crisis of 2008?
Wachovia? Lehman? The S&L crisis and how congress played dumb with the Keating Five?
Anonymous
03/19/2023 13:08
Subject: SVB Bank Run: Fed Calling Emergency Meeting
Anonymous wrote:Anonymous wrote:Anonymous wrote:We should have done with Iceland did in '08. Let the banks fail, bail out the consumers, and prosecute the bankers.
This is a lot easier in a country with less than 400,000 people.
+1 Also, most of the country is uninhabited, and it has restrictive immigration policies.
And has a robust fishing industry