Silicon Valley Bank: Prime example of when industry captures regulator

[JackSeal]

Silicon Valley Bank's president successfully pressured lawmakers to weaken bank risk regulations before his bank's collapse.

They captured the regulator.

And as a result, 93% of the bank's $161 billion in deposits are uninsured, according to Max Reyes at Bloomberg News.

California is the largest sub-national economy in the world.

If California were a sovereign nation (2022), it would rank in terms of nominal GDP as the world's fifth largest economy, behind Germany and ahead of India.

Furthermore, California's agriculture industry has the highest output of any U.S. state.

California's agriculture industry is the largest in the country, averaging $50 billion in annual revenue and employing more than 400,000 people.

Ag+tech has been one of the hottest growth categories in our industry.

The Silicon Valley Bank fallout has catastrophic implications far beyond traditional tech.

[AverageDesiGuy]

What is the situation of banking sector, already Wells Fargo lo balance are showing up incorrect ani Twitter lo trending.

[nokia123]

10 hours ago, JackSeal said:

Silicon Valley Bank's president successfully pressured lawmakers to weaken bank risk regulations before his bank's collapse.

They captured the regulator.

And as a result, 93% of the bank's $161 billion in deposits are uninsured, according to Max Reyes at Bloomberg News.

California is the largest sub-national economy in the world.

If California were a sovereign nation (2022), it would rank in terms of nominal GDP as the world's fifth largest economy, behind Germany and ahead of India.

Furthermore, California's agriculture industry has the highest output of any U.S. state.

California's agriculture industry is the largest in the country, averaging $50 billion in annual revenue and employing more than 400,000 people.

Ag+tech has been one of the hottest growth categories in our industry.

The Silicon Valley Bank fallout has catastrophic implications far beyond traditional tech.

Uninsured deposits endhi baa? 
bank ki fdic insurance protection unte saalu kadha anni accounts ki protection untundhi 250k limit varaku…malla indhulo konni uninsured accounts etta ayyayi?

[bayarea]

44 minutes ago, nokia123 said:

Uninsured deposits endhi baa? 
bank ki fdic insurance protection unte saalu kadha anni accounts ki protection untundhi 250k limit varaku…malla indhulo konni uninsured accounts etta ayyayi?

Anything over $250k is uninsured 

[Pavanonline]

44 minutes ago, nokia123 said:

Uninsured deposits endhi baa? 
bank ki fdic insurance protection unte saalu kadha anni accounts ki protection untundhi 250k limit varaku…malla indhulo konni uninsured accounts etta ayyayi?

May be they mean most are above the 250k limit. Lot of them are start ups just keeping their money there. Everyone will probably get the money back but it'll take time unless someone outright buys the bank and provides liquidity. Problem is the start ups that have to run payroll end of the month don't have time to wait for payment, so it'll effect their operations and probably close. California ni gattigane padatadi debba. 

[csrcsr]

3 hours ago, AverageDesiGuy said:

What is the situation of banking sector, already Wells Fargo lo balance are showing up incorrect ani Twitter lo trending.

Adi bug anta bro they are fixing it

[umyan]

 

[macha]

Ma company holds funds in this banks not sure we get paid 😢 hope they get funds to run the company…

[hunkyfunky2]

2 hours ago, nokia123 said:

Uninsured deposits endhi baa? 
bank ki fdic insurance protection unte saalu kadha anni accounts ki protection untundhi 250k limit varaku…malla indhulo konni uninsured accounts etta ayyayi?

These are startup accounts - billions of VC money. No FDIC for them 

[Codemonkey]

1 hour ago, Pavanonline said:

May be they mean most are above the 250k limit. Lot of them are start ups just keeping their money there. Everyone will probably get the money back but it'll take time unless someone outright buys the bank and provides liquidity. Problem is the start ups that have to run payroll end of the month don't have time to wait for payment, so it'll effect their operations and probably close. California ni gattigane padatadi debba. 

If there really is a problem as they are predicting, ripple effects will be there all over.

IMO SVB will be saved by the feds by a combination of bail out money + FDIC + selling assets. It will take some time but I think it will happen. Unlike in some of the other failures, there is no loss of capital, its just that the capital is tied up in low yield (but also low risk) mortgage backed securities.

[Codemonkey]

BTW I just drove past the SVB HQ on Tasman, I see lot of folks standing right outside the Bank (not sure what they plan to do there).

[Epic]

22 minutes ago, umyan said:

 

 

[hunkyfunky2]

2 hours ago, Pavanonline said:

May be they mean most are above the 250k limit. Lot of them are start ups just keeping their money there. Everyone will probably get the money back but it'll take time unless someone outright buys the bank and provides liquidity. Problem is the start ups that have to run payroll end of the month don't have time to wait for payment, so it'll effect their operations and probably close. California ni gattigane padatadi debba. 

80% should be recoverable... It's not like MBS where underlying assets are worthless 

[hunkyfunky2]

14 minutes ago, Codemonkey said:

If there really is a problem as they are predicting, ripple effects will be there all over.

IMO SVB will be saved by the feds by a combination of bail out money + FDIC + selling assets. It will take some time but I think it will happen. Unlike in some of the other failures, there is no loss of capital, its just that the capital is tied up in low yield (but also low risk) mortgage backed securities.

It's mostly us Treasury bonds ? They are liquid - some loss though 

[Codemonkey]

19 minutes ago, hunkyfunky2 said:

It's mostly us Treasury bonds ? They are liquid - some loss though 

They did invest in low risk MBS - Mortgage backed securities with interest rate of 1.5%.

This is same MBS from 2008 but just low risk and little restructured. When Fed raised interest rates, the value of the MBS went down.