Discussion
Surprised to read this, inference is that there are problems across the banking sector again? Could there be a domino effect?
Silicon Valley Bank: Regulators take over as failure raises fears
https://www.bbc.co.uk/news/business-64915616
Silicon Valley Bank: Regulators take over as failure raises fears
https://www.bbc.co.uk/news/business-64915616
M1AGM said:
Surprised to read this, inference is that there are problems across the banking sector again? Could there be a domino effect?
Silicon Valley Bank: Regulators take over as failure raises fears
https://www.bbc.co.uk/news/business-64915616
Just no. There will be no contagion. Silicon Valley Bank: Regulators take over as failure raises fears
https://www.bbc.co.uk/news/business-64915616
cliffords said:
_-XXXX-_ said:
You do realise how a bank run works? Things are going to go pop. 2008..lol, that and some.
I do know how it works. I worked in Banking for 39 years up until 11 months ago. Banks don't work and are not set up anything like how they were in 2008 now.
It’s a tough one , was easy to dismiss SVB as a one off , they were an outlier among the smaller US banks that themselves were not subject to similar capital requirements that the eurozone enforced
That we are here with CS and a backdrop of high inflation and rates makes me less confident this will all have blown over in a few weeks
If they impair CS holdco this weekend all bets are off
That we are here with CS and a backdrop of high inflation and rates makes me less confident this will all have blown over in a few weeks
If they impair CS holdco this weekend all bets are off
Traffic said:
The media are mainly to blame here, they are constantly talking down the economy and are total fear merchants. They need banning too when it comes to any economic views.
If the only thing keeping a company/bank/economy up is blind, misplaced, faith then it's all a sham and it's only a matter of time until reality reasserts itself.Reporting on this does not make the media "mainly to blame". Not reporting on it would be complicity.
We should probably mainly blame the useless and corrupt boards, and the weak and useless politicians who will bail them out at our expense.
grumbledoak said:
Traffic said:
The media are mainly to blame here, they are constantly talking down the economy and are total fear merchants. They need banning too when it comes to any economic views.
If the only thing keeping a company/bank/economy up is blind, misplaced, faith then it's all a sham and it's only a matter of time until reality reasserts itself.Reporting on this does not make the media "mainly to blame". Not reporting on it would be complicity.
I think we do have a problem, but not for the general reason that the conspiracy types generally quote.
Those who are shocked that Banks don’t actually have all the money deposited sitting in a vault all the time don’t understand Banking. If they did do that, what would they lend (I know you can use wholesale markets but that’s expensive and has its own issues)? Plus, banks would earn savers and current account holdersnothing on the money we deposit, so we’d all have to pay to keep our money safe.
However, this is the first Bank run in the age of Social Media and widespread digital withdrawals. It happened faster than any previously ($47bn withdrawn in days), not helped by the fact that the savers were all tech savvy types, and the rumour mill went into overdrive (some VCs were already encouraging withdrawals weeks earlier).
So the current Capital Adequacy rules do need to be reviewed, and new safeguards introduced to slow/prevent runs on the Bank in future. What those look like I don’t know, but this definitely signals something needs to change. Just not because Banking is fundamentally flawed or Banks are weak, but because the environment has changed.
Those who are shocked that Banks don’t actually have all the money deposited sitting in a vault all the time don’t understand Banking. If they did do that, what would they lend (I know you can use wholesale markets but that’s expensive and has its own issues)? Plus, banks would earn savers and current account holdersnothing on the money we deposit, so we’d all have to pay to keep our money safe.
However, this is the first Bank run in the age of Social Media and widespread digital withdrawals. It happened faster than any previously ($47bn withdrawn in days), not helped by the fact that the savers were all tech savvy types, and the rumour mill went into overdrive (some VCs were already encouraging withdrawals weeks earlier).
So the current Capital Adequacy rules do need to be reviewed, and new safeguards introduced to slow/prevent runs on the Bank in future. What those look like I don’t know, but this definitely signals something needs to change. Just not because Banking is fundamentally flawed or Banks are weak, but because the environment has changed.
Edited by 67Dino on Saturday 18th March 10:19
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