Silicon Valley Bank (UK)

[AtW]

"Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors."

"All depositors of this institution will be made whole."

https://www.federalreserve.gov/newse...y20230312b.htm

The only right move. Same will happen in the UK, as it fooking should be.

[AtW]

How the fook do you run a business without worrying about risk?

Losing all your money in a regulated bank's deposit should not be a factor in running a business - deposit isn't buying bonds, shares, giving loan etc - it's a fecking deposit money in a fecking regulation institution, should be 100% covered, or at the very worst - 90% over level of X - but not worse than that, 10% haircut would be fair maximum risk honest deposit holders should face - matched by reduced pension to civil servants responsible for regulation, frankly both management should go to jail as well as lots of people responsible for regulation. Depositors - fully covered, or at least 90%.

[jamesbrown]

Losing all your money in a regulated bank's deposit should not be a factor in running a business - deposit isn't buying bonds, shares, giving loan etc - it's a fecking deposit money in a fecking regulation institution, should be 100% covered, or at the very worst - 90% over level of X - but not worse than that, 10% haircut would be fair maximum risk honest deposit holders should face - matched by reduced pension to civil servants responsible for regulation, frankly both management should go to jail as well as lots of people responsible for regulation. Depositors - fully covered, or at least 90%.

What is the fecking point of FDIC and FSCS if every hipster doofus bank that engages in transparently dodgy investments has their depositors bailed out? Total nonsense. The haircut should be whatever the losses are above the FDIC and FSCS limits, which shouldn't be that big anyway and, indeed, probably will be about 10%. Shareholders should lose everything, obvs. There is risk in everything. If you cannot see that placing your entire working capital with a hipster bank that has been making transparently poor investment decisions is a bad idea™, then you have absolutely no business being in business and should instead focus on being a common or garden cretin.

[AtW]

What is the fecking point of FDIC and FSCS if every hipster doofus bank that engages in transparently dodgy investments has their depositors bailed out?

Buying US Govt bonds is hardly dodgy...

Deposits should be covered - even IceSave was bailed out and they were offering pretty high level of interest, still - deposit is SACRED as it fecking should be, no limits - SAFE AS A DEPOSIT should be the phrase, otherwise everything collapses. Deposit in a regulated bank should be ZERO RISK for depositor - but likely jail for management if they feck up.

[jamesbrown]

Buying US Govt bonds is hardly dodgy...

It is when you're in the business of meeting short-term requests from depositors as they arise and you're ploughing everything into long-dated Treasuries in an environment where interest rates are rising rapidly

As I said, we need to reinstate the moron risk premium.

[jamesbrown]

"Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors."

"All depositors of this institution will be made whole."

https://www.federalreserve.gov/newse...y20230312b.htm

The only right move. Same will happen in the UK, as it fooking should be.

The crucial phrases.

No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

Shareholders and certain unsecured debtholders will not be protected.

[AtW]

The crucial phrases.

Yes, it's bail out for depositors as it should be - everybody else is ****ed, which is ok.

Should be enough to prevent the bank runs, which this is all about.

[jamesbrown]

Yes, it's bail out for depositors as it should be - everybody else is ****ed, which is ok.

Should be enough to prevent the bank runs, which this is all about.

As long as it costs the taxpayer nothing, there is nothing to complain about. That is the requirement. In other words, if the assets exceed the debts on (eventual) liquidation or it can be sold as an ongoing concern and the new owner agrees to meet the uninsured costs of the bailout, no problem, that is how markets should work. If it's a question of the taxpayer bailing out depositors, that is not how it should work and would be nuts, post 2008.

[AtW]

As long as it costs the taxpayer nothing, there is nothing to complain about.

[jamesbrown]

I wonder if there's a way to automate that smiley with your posts