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Bank Run

TownieDeac said:
Are you in favor of further and more stringent regulations? I see a lot of media pointing fingers at Trump for signing the rollback of Dodd Frank in 2018 into law, but it got bipartisan congressional support. Feels like we react to crises like this with reactionary regs, then roll them back when things are humming again. Surely there’s a better way.
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Bipartisan is kinda true. Republicans supported it much more than Democrats. Something like 98% to 35% iirc.

E:

www.businessinsider.com

Why Trump is being called out in the Silicon Valley Bank collapse

Sens. Elizabeth Warren and Bernie Sanders called out Trump's 2018 rollback of parts of a key 2010 banking law following SVB's fallout. Here's why.
www.businessinsider.com www.businessinsider.com

In 2018, the House passed a rollback of regulations in Dodd-Frank by a vote of 258-159, and in the Senate, 17 Democrats joined Republicans to get the bill to Trump's desk and signed into law.
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bym051d said:
Bipartisan is kinda true. Republicans supported it much more than Democrats. Something like 98% to 35% iirc.

E:

www.businessinsider.com

Why Trump is being called out in the Silicon Valley Bank collapse

Sens. Elizabeth Warren and Bernie Sanders called out Trump's 2018 rollback of parts of a key 2010 banking law following SVB's fallout. Here's why.
www.businessinsider.com www.businessinsider.com
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Fair, but folks like Mark Warner and Barney Frank lobbied pretty hard. My point mostly being it’s not just a Trump thing, and I’m interested in any solution that isn’t just kicking the can down the road.
 
One of my pet peeves in politics is when a bill that’s like 98% one party and a little bit of another is called “bipartisan” instead of joining the other party.
 
PhDeac said:
So who lost from this bank collapse? The execs got out before the collapse. Clients got their money back. So middle management and staff?
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Not shedding a tear for them but it’s not accurate to say the execs got out before the collapse. Not going to look it up but would guess c-suite had tens of millions of dollars in stock, deferred comp, options, etc that just got wiped out.
 
Louis Gossett Jr said:
In this thread a bunch of people that work for banks defend banks while trying to hide from the fact banks really don’t provide anything to society but moving money around to make more money for rich people.
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Hey I don’t work for a bank (anymore)!

And while banks have plenty of activities that are simply moving money around and creating esoteric financial products, their core functions are still pretty damn fundamental to society. Safe place to keep your money, facilitating home ownership, helping businesses expand, etc.
 
Big banks reportedly raking in tens of billions of dollars in new deposits each in the past few days.
 
TownieDeac said:
Are you in favor of further and more stringent regulations? I see a lot of media pointing fingers at Trump for signing the rollback of Dodd Frank in 2018 into law, but it got bipartisan congressional support. Feels like we react to crises like this with reactionary regs, then roll them back when things are humming again. Surely there’s a better way.
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Rolling back part of Dodd Frank was not the issue here since SVB would have passed the stress test.
 
DeacMan said:
Rolling back part of Dodd Frank was not the issue here since SVB would have passed the stress test.
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www.cnn.com

For obvious reasons, it’s impossible to say for sure whether SVB might have been able to survive in an alternate universe without the 2018 rollback. And any bank collapse has numerous complex causes. So experts and advocates are divided on the extent to which the Trump law played a role in SVB’s downfall.
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I'll contact CNN to update their article.
 
bym051d said:

Loading…

www.cnn.com


I'll contact CNN to update their article.
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And yesterday CNBC reported a group of consultants ran SVB through a pro forma stress test and determined they would have passed the test. And then they immediately said obviously something was missed and has to be fixed in the regs. So call them as well.
 
DeacMan said:
And yesterday CNBC reported a group of consultants ran SVB through a pro forma stress test and determined they would have passed the test. And then they immediately said obviously something was missed and has to be fixed in the regs. So call them as well.
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Link? Glad we have definitive evidence now.
 
TownieDeac said:
I get that, can we return to the question?
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If by more stringent you mean smarter regs that would have accounted for long term investments as marked to market, of course. The fix is likely that simple. Dodd Frank was written in a period of unprecedented credit expansion with low rates. It perhaps never asked what happens if we raise rates quickly to our test.
 
TownieDeac said:
I get that, can we return to the question?
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Your question was should we have more stringent regulation? I think so. Modifying the stress testing formulas for sure. And I’m not sure why smaller banks need to be exempt from these sorts of requirements too, but certainly the first thing I said.

At the end of the day this is a business that did a bad job and as a result is going out of business. In general that is what should happen whether it’s a bank or a store or Ballys or a restaurant that made expensive bad food.
 
question I have is what is the point of the $250k upper limit on FDIC insurance?
 
06deacon said:
Your question was should we have more stringent regulation? I think so. Modifying the stress testing formulas for sure. And I’m not sure why smaller banks need to be exempt from these sorts of requirements too, but certainly the first thing I said.

At the end of the day this is a business that did a bad job and as a result is going out of business. In general that is what should happen whether it’s a bank or a store or Ballys or a restaurant that made expensive bad food.
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Yeah this is why I ask, it feels like a failure at the bank manager level but maybe something regulators should have a better handle on too.
 
seems to me like there is a solid case for raising the FDIC limits on corporate accounts? I'm not sure it's realistic to expect a company to do their payroll out of several different bank accounts, but I'm also not in accounting not really sure how it all works.
 
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