Bottom line is humans can't be trusted with smart choices 100% of the time. Hence prudent regulations are required. Trump's shortsighted rollback of some of those safeguards allowed for irresponsible decisions to be made. Now yet again the responsible pay for the consequences of the irresponsible. If you don't want regulation be prepared to face the consequences of stupidity.
Bottom line is humans can't be trusted with smart choices 100% of the time. Hence prudent regulations are required. Trump's shortsighted rollback of some of those safeguards allowed for irresponsible decisions to be made. Now yet again the responsible pay for the consequences of the irresponsible. If you don't want regulation be prepared to face the consequences of stupidity.
Of course they do. What do you think regulatory capture is? Change that with our votes? We are awash in corruption and ineptitude. Those we have elected have escaped accountability for so long they are completely emboldened. At this point I would not be surprised if Hunter Biden were an investor, lender, borrower, customer and on the board of SVB.
Even if true it does not validate your statement regarding g humans and their need for regulation, by other humans. The moral of the Roman empire is that morality cannot be legislated. While what SVB leadership did was abhorrent the really immoral thing is the non-bailout bailout as it essentially rewarded bad behavior. Plus existing rules/laws were not followed and it appears the SF Fed was lax.
There's no perfect answer here as it's obvious humans cannot regulate themselves that's why we have roles in a civilized society. Regulators have the role of regulating, is it perfect? Not in the least but it is a deterrent.
While I agree that there is no perfect solution I have far more faith in infallible humans than I do in government regulators. IMO those who believe in government fixes for everything are the ones incapable of ruling themselves. And are ruining it for more cognizant folks. I also find it very interesting that you have no hesitation squarely placing all SVB collapse blame on Trump although his actions were a bi-partisan action, while simultaneously placing no fault on the Biden administration for its certain role in the collapse - high interest rates which devalued the bonds SVB relied on to secure its deposits. But rather your solution is more governance. There is none so blind as he who will not see.
Lynne I'm tired of conversing along party lines, I just don't do it. We've debated here in the past and looks like you're okay going that. You're making some assumptions here, criticizing the roll back of prudent regulations is not the same as asking for more regulations or making regulations the answer all. The higher interest rate were necessary to combat inflation and SVB being a financial institution should have shuffled their investments but were free to be reckless because they didn't have any guard rails anymore. I absolutely don't agree with the bailout but the ramifications of not intervening would've been worse given how the herd panic works. The government is also made up of humans we can be a Monday morning quarterback all we want but being in public service is a sacrifice. It's hard to regulate with the polarization in politics and the ever scorching public eye.
Shri, your holier than thou is tedious. But you have played true to form. When you can't use your words anymore, blame the other person. Conversation over.
Which are responsible for SVB? Or was it just stupidity of management? Like no risk officer for 9 months? Obvious imbalance in assets versus likely demand. I’m not sure any regulation or lack is responsible.
Yes, agree very much, but we can't cherry pick what contributed. All of it contributed. Rollbacks gave banks more free rein, but they are ultimately responsible for reckless behavior. Kind of like what happens when you buy your teenager a brand new car or allow them to stay home alone on a weekend you're away. You hope they act responsibly, but...
Possibly, though I suspect the lack of some or other reg didn't do these fools in. I'd have to be a whole lot more conversant with the process by which bank risk is managed in fact by knowledgeable people and what additional latitude (if that is the right word) these regionals got with the rollback.
I think the obvious things are no risk professional in place at the beginning - the start of inflation and the uptick in Fed rates together with the greed in seeking higher returns for the flood of new deposits - brought on by the insane "zero interest rate" Fed policy for decades. I'd say reg rollback is likely a pale companion to those items. Occam's Razor it seems applies here. And it seems the Fed is squarely at the center of this: Created zero interest rate free only, failed, though the SF Fed Bank to properly supervise, and now the lender of last resort to the depositors (to the tune of hundreds of millions for single depositors!!!).
Bottom line is humans can't be trusted with smart choices 100% of the time. Hence prudent regulations are required. Trump's shortsighted rollback of some of those safeguards allowed for irresponsible decisions to be made. Now yet again the responsible pay for the consequences of the irresponsible. If you don't want regulation be prepared to face the consequences of stupidity.
That is a tautology. You say humans need regulating because they aren't always right but who do you think creates the regulations?
People who create regulations don't have an incentive to profit from them. If there's corruption with regulations we change that with our votes.
Of course they do. What do you think regulatory capture is? Change that with our votes? We are awash in corruption and ineptitude. Those we have elected have escaped accountability for so long they are completely emboldened. At this point I would not be surprised if Hunter Biden were an investor, lender, borrower, customer and on the board of SVB.
If the guardrails were not removed by Trump SVB would not have been able to make risky investments without having enough collateral to do so.
Even if true it does not validate your statement regarding g humans and their need for regulation, by other humans. The moral of the Roman empire is that morality cannot be legislated. While what SVB leadership did was abhorrent the really immoral thing is the non-bailout bailout as it essentially rewarded bad behavior. Plus existing rules/laws were not followed and it appears the SF Fed was lax.
There's no perfect answer here as it's obvious humans cannot regulate themselves that's why we have roles in a civilized society. Regulators have the role of regulating, is it perfect? Not in the least but it is a deterrent.
While I agree that there is no perfect solution I have far more faith in infallible humans than I do in government regulators. IMO those who believe in government fixes for everything are the ones incapable of ruling themselves. And are ruining it for more cognizant folks. I also find it very interesting that you have no hesitation squarely placing all SVB collapse blame on Trump although his actions were a bi-partisan action, while simultaneously placing no fault on the Biden administration for its certain role in the collapse - high interest rates which devalued the bonds SVB relied on to secure its deposits. But rather your solution is more governance. There is none so blind as he who will not see.
Lynne I'm tired of conversing along party lines, I just don't do it. We've debated here in the past and looks like you're okay going that. You're making some assumptions here, criticizing the roll back of prudent regulations is not the same as asking for more regulations or making regulations the answer all. The higher interest rate were necessary to combat inflation and SVB being a financial institution should have shuffled their investments but were free to be reckless because they didn't have any guard rails anymore. I absolutely don't agree with the bailout but the ramifications of not intervening would've been worse given how the herd panic works. The government is also made up of humans we can be a Monday morning quarterback all we want but being in public service is a sacrifice. It's hard to regulate with the polarization in politics and the ever scorching public eye.
Shri, your holier than thou is tedious. But you have played true to form. When you can't use your words anymore, blame the other person. Conversation over.
Look in the mirror for a change and be open minded. Thanks though I know not to respond to small minded people like you.
Oh no! I will.miss you! 😘
Name one such Trump “rollback” that caused this.
May 2018: President Donald Trump signed the biggest rollback of bank regulations since the global financial crisis into law Thursday.
https://www.cnbc.com/2018/05/24/trump-signs-bank-bill-rolling-back-some-dodd-frank-regulations.html
https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2018/11/01/the-finance-202-trump-era-rollback-of-dodd-frank-leaps-forward/5bd9e0291b326b37e00b5a51/
Which are responsible for SVB? Or was it just stupidity of management? Like no risk officer for 9 months? Obvious imbalance in assets versus likely demand. I’m not sure any regulation or lack is responsible.
Yes, agree very much, but we can't cherry pick what contributed. All of it contributed. Rollbacks gave banks more free rein, but they are ultimately responsible for reckless behavior. Kind of like what happens when you buy your teenager a brand new car or allow them to stay home alone on a weekend you're away. You hope they act responsibly, but...
Possibly, though I suspect the lack of some or other reg didn't do these fools in. I'd have to be a whole lot more conversant with the process by which bank risk is managed in fact by knowledgeable people and what additional latitude (if that is the right word) these regionals got with the rollback.
I think the obvious things are no risk professional in place at the beginning - the start of inflation and the uptick in Fed rates together with the greed in seeking higher returns for the flood of new deposits - brought on by the insane "zero interest rate" Fed policy for decades. I'd say reg rollback is likely a pale companion to those items. Occam's Razor it seems applies here. And it seems the Fed is squarely at the center of this: Created zero interest rate free only, failed, though the SF Fed Bank to properly supervise, and now the lender of last resort to the depositors (to the tune of hundreds of millions for single depositors!!!).
Some good analyses out there. A bit over my head.
https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthew-s-levine