Silicon Valley Bank Parent Company Files for Bankruptcy

What happened? Greed happened.

These large regional bank argued that they need not have the same regulatory oversight that the big national banks are required to have. They spent millions in lobbying efforts to get the 2018 rollback on regulatory oversight passed by the Republicans and the trump as well as a few of the Democrats.

These large regional banks no longer had to submit to stress tests to assure that they maintained adequate liquidity to prevent a bank run, They used this release to engage in speculative investments which dramatically increased their valuations from 2018 until today - in some cases by 300% or 400% by speculative investments.

Repealing the 2018 trumpulican legislation would put some of these protections back in place and that is the first thing that needs to be done.

Increasing the FDIC limit on protection for depositors is another step that can help. It would require that the FDIC to raise the insurance rates for banks who have depositors protected by the FDIC, so that depositors with more than $250K can be fully insured as well.

Further, the regulatory rules will have to change to address the recent banking changes that allow immediate access to depositors accounts which can greatly increase the rate and severity of a bank run due to any number of economic actions.

Banks need to be safe repositories of depositor assets and not investment enterprises willing to risk depoistor assets for the banks fainacial growth.

I appreciate that the FDIC actions were made to prevent a cascading loss in confidence of the banking industry generally, as this would have been much more consequential.

I also appreciate that Biden made it clear that investors in the failed banks are not being protected by these actions as they are the ones intentionally engaged in speculative investments which always have inherent risk.

Its not the responsibility of the US Government or tax payers to underwrite companies to take risks in their investments. Instead the regulations requiring sufficient cash on hand be available and not invested in financial instruments with interest rate risk need to be reinstated. The 2008 financial failure, and more recently Silicon Valley & Signature Bank (go to lender for Trump & Kushner families) failures are proof.

"A package of regulations put in place after the financial crisis (called Dodd-Frank) was not nearly as strict as the banking laws and regulations of the 1930s. It required that the banks submit to stress tests by the Fed and hold a certain minimum amount of cash on their balance sheets to protect against shocks, but it didn’t prohibit banks from gambling with their investors’ money. Why not? Because Wall Street lobbyists, backed with generous campaign donations from the Street, wouldn’t have it."

"Which brings us to Friday’s failure of the Silicon Valley Bank. You didn’t have to be a rocket scientist to know that when the Fed raised interest rates as much and as fast as it did, the financial cushions behind some banks that had invested in Treasury bonds would shrink. Why didn’t regulators move in?"

"Because even the thin protections of Dodd-Frank were rolled back by Donald Trump, who in 2018 signed a bill that reduced scrutiny over many regional banks and removed the requirement that banks with assets under $250bn submit to stress testing and reduced the amount of cash they had to keep on their balance sheets to protect against shock. This freed smaller banks – such as Silicon Valley Bank (and the Signature Bank) – to invest more of their deposits and make more money for their shareholders (and their CEOs, whose pay is linked to profits)."

https://www.businessinsider.com/signature-bank-ivanka-jared-kushner-michael-cohen-trump-org-2018-7?amp

https://amp.theguardian.com/commentisfree/2023/mar/13/svb-collapse-2008-financial-crisis

I would support increased limits due to inflation and how much $250,000 is worth these days, but I don't know that it should be unlimited.

I understand the risks posed by the failure of these SVB depositors to get their monies, but I don't think the FDIC can go around protecting all depositors at all banks going forward.

I would support increased limits for small businesses and individuals, up to a point, but the rest should be handled in bankruptcy court. Those of us who worked for small businesses that went broke and couldn't make payroll didn't have the FDIC come along and bail us out when our paychecks stopped coming.

As for saving SVB, I think the FDIC made the right call here and am glad the government didn't save the bank itself. They needed to learn their lesson and be a role model for when financial institutions do not practice safe investing.

typical...the profits belong to the banks, but when thier risks fail, its up to the tax payer to ''bail'' them out...who bails me out if I start a business and it fails? or if I can't afford a life saving medical procedure?

in the words of Bernie Sanders ''

In America today, if you're a wealthy vulture capitalist with over $250,000 in uninsured deposits at a loosely-regulated bank, the federal government will guarantee that your money is safe in a weekend.

If you’re a struggling working person with no health insurance and get cancer, you're on your own.

That’s what Martin Luther King Jr. would call "socialism for the rich and rugged individualism for the poor."

It outrages me to watch wealthy bankers and their lobbyists repeatedly endanger the American economy, fight common-sense efforts to regulate them, and then expect the government to bail them out when they create a crisis.

If bankers were smart & ethical they wouldn't be bankers

If your product costs less than 5% and you are earning a weighted gross margin of 20% or more and you still lose money then you have to be dumb

perhaps its time to create a 'repository' where you simply pay a fee for safekeeping and transfers - a 'warehouse'

We already have trading platforms to take any portion of funds to 'gamble' with! Why would I authorize a 'bank' to use my deposits for flying kites? 

if you combine the two - as we have now it becomes a defacto 'ponzi' house and no taxpayer should have to bail them out! 

We need to bring bac ban regulations like Dodd-Frank and the Glass–Steagall act, that protected customers of banks, instead of allowing banks to invest our money with no restraints.

More money than that? Spread it around. 

Just say NO! Ahead of the colaspe stocks were cashed in , bonuses given another case ocf tender loving GREED .

I answered “Yes” to increasing FDIC insurance.  However, I would suggest raising it to no more than $500k.  As the treasurer of a town library with an annual budget and reserves of less than $750k, this would allow our library to have all of its funds fully insured in the two banks we currently use, rather than having the funds currently in excess of the $250k that we keep in one bank uninsured or requiring that we go to a third bank and do a three way juggle to manage our funds.

I answered

Since both savings and IRA funds are in a lot of banks the fdic should ensure the banks don't loose any funds. 

If SVB is bailed out, every bank will be expecting it and the FDIC won't do it.

Then repeal the looser banking regulations that trump passed

It may be true that the majority of Americans don't know that the FDIC only insures bank deposits up to a statutory limit, currently $250,000. However, those who have the means to place more than $250,000 in a single bank account definitely should know this. If they chose to deposit more in a single institution, presumably they evaluated the risk and chose (at best) laziness or (at worst) corruption. In any case, they chose the risk and that's that. No extra rescue for them!

Each and every one of us are held responsible for our own actions.  Bankers, their CEOs and board of directors are no exception to the rule.  Once again this reminder, "Don't do the crime if you can't do the time".  They must be held responsible for their mistakes just like the rest of us.  Greed is the main cause.  There is no denying that.  Therefore, they should deal with the situation all on their own without government aid.  They can sit with the homeless, the poor, the starving to pay for their negligence for eternity for all I care.  Maybe they will learn a thing or two, though I doubt it.  I've had to pay for my own mistakes and so should they.

If it crashed but the Bank President made $2 Million in personel profit.

Government should backup... 

Just no consequences for bad judgement. Most of depositors liked woak environment. They gave $75 million to Black Lives Matter and affiliates. Like the crypto failures, these people bought "protection" from the Democrats.

No they should have more audits to catch this from happening

yes

Fuck the grossly rich. Unless they agree to more taxes, they can suck it. It's amazing how we complain about the poor needing help but we open our collective fucking wallets whenever the rich need some help. It's bullshit.

How long ago was this limit set.?

Taxpayers are NOT responsible for bailing out banks! 

I think the board members and executive management should be frog marched to jail by Elizabeth Warren and imprisoned for life.  If even a co-sponsor of Dodd-frank is allowed to get away with this atrocity only shows that the government cannot be trusted. Barney Frank should go to jail sitting on the board of Signature Bank and not requiring additional regulation for the bank he was responsible for

It should not, however, reimburse shareholder losses and should not mitigate investigations into executives’ and regulators’ behavior.