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Bank Run

bmoneydeac said:
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.
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The core functions are important and fundamental to society. The other stuff is fundamental to relatively few people.
 
now NYT comes out with an alert on my phone talking about an ACCOUNTING LOOPHOLE!!! (aka HTM accounting) that SVB used to “mask its brewing troubles” to quote from the article.

FFS it is not a loophole it is a run of the mill accounting principle applied correctly. It’s about as much of a loophole as a fixed speed limit is to traffic law. But that doesn’t drive clicks I suppose.
 
Newsom gonna get brought down by SVB?

California Gov. Gavin Newsom lobbied the White House and the Department of the Treasury about the pending bailout of Silicon Valley Bank, even as three of his private wineries had apparently been among the bank's clients, according to a Tuesday report by Ken Klippenstein of the Intercept.

It is unclear whether those personal accounts were still active at the time of the bank's collapse last week. If they were, Newsom could have stood to benefit directly from the Biden administration's rescue package, which will reimburse SVB account holders even if their balances surpass the $250,000 limit insured by Federal Deposit Insurance Corporation.
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www.yahoo.com

California Gov. Gavin Newsom failed to publicly disclose his SVB ties while lobbying for a bailout

Reports link Newsom to the failed SVB through personal accounts, three Newsom-owned wineries, and his wife's charity.
www.yahoo.com www.yahoo.com
 
1. Newsome has survived worse.
2. He can make a strong case that it's the correct decision for lots of Californians, regardless of his stake.
 
nothing appeals to independents in flyoverstates more than taxpayer funded winery bailouts.
 
bym051d said:
1. Newsome has survived worse.
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EgO5O_MXgAA0fzJ.jpg:large
 
06deacon said:
now NYT comes out with an alert on my phone talking about an ACCOUNTING LOOPHOLE!!! (aka HTM accounting) that SVB used to “mask its brewing troubles” to quote from the article.

FFS it is not a loophole it is a run of the mill accounting principle applied correctly. It’s about as much of a loophole as a fixed speed limit is to traffic law. But that doesn’t drive clicks I suppose.
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Yeah, don't you dare follow GAAP.
 
I mean, I don't know about yall but when I hear "banks" "finance" and "regulatory reform" the first thing I think of is how people of color have materially driven those sectors into the ground.
 
Wakeforest22890 said:
I mean, I don't know about yall but when I hear "banks" "finance" and "regulatory reform" the first thing I think of is how people of color have materially driven those sectors into the ground.
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sure but can you tell me some ways they haven't"?
 
Wakeforest22890 said:
I mean, I don't know about yall but when I hear "banks" "finance" and "regulatory reform" the first thing I think of is how people of color have materially driven those sectors into the ground.
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who do ya think were taking out all those subprime mortgages?
 

Opinion | After Silicon Valley Bank, scrap the bank deposit insurance limit​


Insuring all deposits upfront would also simplify cash management practices for countless businesses and other institutions. The limit puts the onus on every large depositor to be an expert in bank balance sheets, loan portfolios, and interest-rate and liquidity risks. Why should auto parts manufacturers and nonprofits be expected to have this expertise? They don’t, of course — and in response, many of them try to reduce risk through expensive workarounds, such as by using third-party services, to split their balances among multiple banks and other financial institutions. But this partial fix makes what should be easy — holding money — pointlessly complicated.
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There are still other benefits. Removing the cap would lessen large depositors’ incentives to flock to the largest, “too big to fail” banks, where they can count on a government bailout. It would also lessen demand for non-bank “money substitutes,” such as money market mutual funds and “repo” balances with Wall Street firms, which have proved even more unstable than bank deposits.
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Also, while some might say that explicitly insuring all deposits would reduce market discipline on banks, there are plenty of other, less disruptive sources of market discipline on banks, including the stock, bond and derivatives markets. Besides, many depositors likely already expect the cap to be waived.
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Finally, and perhaps most importantly, fully insuring all deposits would clarify banks’ place in U.S. society and their relation to the government. The best way to understand the history and structure of our banking laws is that banks exercise delegated power — a bank charter is an outsourcing arrangement, a franchise, to issue money on behalf of the government. By making all deposits a governmental product, scrapping the cap would underscore the fact that banks exist to serve the public interest, not to privatize gains and socialize losses.
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