Posted on 03/12/2023 8:58:20 AM PDT by E. Pluribus Unum
Oh so woke, oh so green, oh so diverse Silicon Valley Bank (SVB) just went bust.
One can go to its website—still up for who knows how much longer—and see that it claims assets of $212 billion. But as they say, the bigger they are, the harder they fall; and SVB makes for the second largest bank failure in U.S. history.
Remarkably, 93 percent of the bank’s $161 billion in deposits are uninsured by the Federal Deposit Insurance Corporation (FDIC), which only covers accounts up to $250,000. And Roku, to name just one whale, had $487 million in Silicon Valley Bank. So, just for starters, a lot of CFOs—the folks in charge of handling a company’s money—are gonna have some ‘splaining to do.
(Excerpt) Read more at breitbart.com ...
I would say it's more a function of how rarely banks fail in the U.S. anymore.
The point is that a company doesn’t have to get very large before those FDIC insurance limits come into play.
Unless I'm misunderstanding something, he seems to be saying that depositors at SVB can somehow come ahead if they stop making loan payments to a bank where they have been forced to take an ownership stake.
Maybe I'm the moron.
And it's 2023, dude. After what I've seen for the last three years, an extensive resume doesn't impress me anymore.
Banks still fail. They are just quickly absorbed by one of the larger banks. Bigger banks, like SVB, are the only ones that make the news because a larger bank taking in SVB might put itself at risk.
It’s past time we broke up the big banks.
The point is that Risk Mitigation is the CFOs primary responsibility as the government will never be able to insure every deposit.
1500 “green” startups. Gone. They were scamming people.
I gave up on it when the “risk mitigation” measures adopted by the C-suite types made it almost impossible to do business profitably.
“Suppose my company gets paid on a $400,000 invoice from a customer. Do I ask the customer to make two separate payments so I’m not depositing more than $250,000 in any one account?”
Sweep accounts are designed to automatically transfer funds that are above a selected balance. That wouldn’t require the customer to do anything.
“Why did they not freeze The bank when the run first started?”
I don’t know how that can be done. There was a Regulation D, currently suspended, that limited the number of withdrawals from savings that you could make per month but I don’t know that there was a quantity restriction.
“Regulation D helped ensure banks had adequate reserves by limiting the number of withdrawals customers could make from savings and money market accounts each month. The rule never applied to checking accounts, which is why those always allowed unlimited withdrawals.
However, as part of the federal government’s financial response to the Covid-19 crisis, the Fed made changes to Regulation D so people could dip into their savings more frequently without penalty.”
https://www.forbes.com/advisor/banking/savings/regulation-d/
Ignoring risk is what got banks in trouble in 2008. SVB managed to try a replay.
And to get an even better sense of SVB’s DEI footprint, we might consider this (now deleted) tweet from one Christina Qi, who identifies herself as a former hedge fund CEO:
"The SVB collapse has been devastating in more ways than one: They supported women, minorities, & the LGBTQ community more than any other big bank. This includes not just diverse events, but actual funding. SVB helped us move one step forward; without them, we move two steps back."
One sharp tweeter responded, “Maybe other banks will take a look at this failure and realize they need to do actual banking instead of virtue signaling.”
Too much of this has infected business today.
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