Jump to content

Silicon Valley Bank: Prime example of when industry captures regulator


JackSeal

Recommended Posts

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.

C5247-AD9-EDE2-4-D70-A0-D5-9775-FB593-D1

Link to comment
Share on other sites

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.

C5247-AD9-EDE2-4-D70-A0-D5-9775-FB593-D1

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?

Link to comment
Share on other sites

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 

Link to comment
Share on other sites

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. 

Link to comment
Share on other sites

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

Link to comment
Share on other sites

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 

  • Sad 1
Link to comment
Share on other sites

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.

  • Upvote 1
Link to comment
Share on other sites

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 

Link to comment
Share on other sites

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 

Link to comment
Share on other sites

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.

  • Upvote 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...