It's not like SVB was exempt from stress testing. Based on the assets they have, their bank gets stressed tested once every two years - even with the Dodd Frank rollbacks. Are we even sure another stress test would have caught this? It clearly didn't catch it last time they were stressed tested.
I'm fine with stress testing them more. Do it twice a year. Unless the actual regulation and supervision improves, nothing will change.
Yes and no, they clearly fell under the 250 bio treshold so they were exempt from many of the harsher dodd frank regulations.... One could argue that the fed could have still intervened but we all know thats not how regulators work....
If the stress tests would have been as rigorous as they are at the big banks yes yes they would have catched it... Imagine thinking a stresstest once every two years is enough when the current situation unfolded in like 4 months.. Also last time they were stress tested Rates where close to 0 and they did have not jet lunched into the 10 year mbs to gain another 0.4BPS of returns...
Ask your selfe why creditsuiss could keep on moving forward despit being in crisis mode for over 2 years now and having hugh capital flight since last september...
Cause they were properly regulated when it comes to their Reserves... Even now the SNB injecting liquidity was more of a try to reinstall trust than a immediat need for liquidity...
The Treasury Secretary’s claim that all is well are belied by the reality at First Republic Bank.
www.wsj.com
I wonder if people who write this understand banking? Like what the fuck did he expect yellen to say? She cannot say we have a problem with X and y bank unless the fdic has already stepped in cause the moment she says this there s a fucken bank run and the Bank is toast... But sure go ahead and blame her for not telling the truth...
Senators who then put her on the hot seat and insisting that she should guarantee all deposits across all banks are just as fucken dumb... Do you really wanna destroy the USD with one fucken big bankrun?
Btw european regulators are allegedly already pissed at their US counter parts for bailing out everybody and not only the insured deposits.. which is the framework that they originally agreed upon.
Also the more i look into it the more this looks like a huge fuckup I mean SVB already invested 2 bio into the vcs that bank with em and were in the process of raising another 2 of course with the caveat that the startups who get the money fully bank with SVB it s a huge circlejerk. Vcs should have known better every startup that was bigger than a 5 people operation should have known better, SVB executives should have known better. But those perks from SVB were just too sweet for founders and for svb the fees were to good so who the fuck cares about risk.........
Again thing pissing me off most is VCs who created this whole shit show are still crying for a bank run shut the fuck up you idiots. Also for some historical context in the last 20 years i think 500 banks went belly up and the lowest recovery rate was 30%...
Now thats not great but most VCs and most startups would have survived that haircut and again that is the largest in the last 20 years.
Matter of fact there are plenty of stories where founder went out on the weekend to raise new money before the situation was clear and they managed to find quite some funding. But lets try to bring down our banking system cause some VCs are fucken crybabies.
Had they taken that 20% or 10% haircut without bitching we would be so much better of now it s either the fed only saves the elites or the fed has to guarantee all the deposits across the US.
To credit suisse looks like the UBS will take over after all atleast parts of CS, I guess regulators rather have the assets in the hands of another swiss bank and they care less about making UBS even more of a TBTF.. Funny thing is the swiss retail unit is Valued at 15bio meanwhile market cap is 7 or 8bio.. Talk about having a disastrous brand.
Still want to point out that this is nothing compared to 08 lets not forget that 100s of banks faild in 08 and 09 and like 50 or so went bust before Bear stearns.
ATM this is not systemcritical but bill ackman, Elon musk, a couple of idiotic VCs and a couple of idiotic Politicians are sure thrying their best to make it so.
10 years of FIF
Nostradamus
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