Banks Failing: Is It 2008 Again?

[Yo ssi]

TL;DR No

[avadah]

“Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed”
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

What does unsecured debt holders mean? People with over $250k?

[liosac]

https://www.theyeshivaworld.com/news/headlines-breaking-stories/2172902/concern-in-the-olam-hatorah-baalei-tzedaka-had-funds-in-svp-we-hope-well-survive-the-crisis.html

If it’s deposits they are fine. If it was stocks or bonds….

[zale]

They did in 2008

Would you be prepared to have thousands of businesses insolvent over this bank?

Is there a point in anything anymore? What's the point of rules if they can be broken at anytime?

Why did Dan spend two hours writing about FDIC insurance today if the government is covering you anyway?

Why not just have everyone do whatever they want because we don't want anyone to get hurt.

[aygart]

Is there a point in anything anymore? What's the point of rules if they can be broken at anytime?

Why did Dan spend two hours writing about FDIC insurance today if the government is covering you anyway?

Why not just have everyone do whatever they want because we don't want anyone to get hurt.

Why should there be a limit? Either insure deposits or don't

[Moshe123]

So why don't they just loan them the money instead of taking them over? According to you the bank was in good shape and profitable. Why didn't another bank step up and takeover this profitable bank?

Because that isn't in the economy's best interest.
However, helping depositers get all their money at the expense of the bank equity holders might be a big incentive for banks to do better.

[dovy2]

I think the lesson to be learned from the story is that management shouldn't have to report every little thing going on.. this "transparency" mishegas is really to blame on this mess, coupled with social media hype and rumors..

[CountValentine]

The shut down was by the state. That may yet happen.

I was talking about Silicon Valley Bank.

[Abey]

Everyone blaming the regulators for issues that were obvious in hindsight, but SVB’s problems were in plain sight for anyone to see in their public financials,  yet it took until last week for anyone to raise alarm. Obviously lessons learned all around.

Guess the question is - what are the regulations that will prevent this sort of risk mismanagement going forward?

there’s different levels of public ie, mark to market.

[UKinNYS]

show some sensitivity rn some frum ppl are out of a job.. 
https://www.linkedin.com/posts/irazlotowitz_to-my-bankers-friends-and-employees-of-signature-activity-7040822612641349633-1FHo?utm_source=share&utm_medium=member_desktop

[aygart]

I was talking about Silicon Valley Bank.

Either way, the bank ownership deserves to be insolvent. THe depositors don't.

[Abey]

I think the lesson to be learned from the story is that management shouldn't have to report every little thing going on.. this "transparency" mishegas is really to blame on this mess, coupled with social media hype and rumors..

How in the world did you get to this conclusion?!!? Transparency would’ve likely prevented this and less transparency would’ve dug the whole deeper until no one could escape

[CountValentine]

Either way, the bank ownership deserves to be insolvent. THe depositors don't.

Nice pivot as it has zero to with the point I made. 

[aygart]

Nice pivot as it has zero to with the point I made. 

So why don't they just loan them the money instead of taking them over? According to you the bank was in good shape and profitable. Why didn't another bank step up and takeover this profitable bank?

Either way, the bank ownership deserves to be insolvent. THe depositors don't.

Profitable but illiquid

A takeover

. That may yet happen.

[CountValentine]

Profitable but illiquid
A takeover

It is not profitable. That is why many suitors with plenty of liquid assets are not taking it over.
It is in bad shape besides illiquid.
If the government makes some suitor a sweetheart deal that would be the only possibility.

[Abey]

It is not profitable. That is why many suitors with plenty of liquid assets are not taking it over.
It is in bad shape besides illiquid.
If the government makes some suitor a sweetheart deal that would be the only possibility.

Biden admin didn’t allow many of the bigs to bid and smaller ones smelled the rat

[liosac]

show some sensitivity rn some frum ppl are out of a job.. 
https://www.linkedin.com/posts/irazlotowitz_to-my-bankers-friends-and-employees-of-signature-activity-7040822612641349633-1FHo?utm_source=share&utm_medium=member_desktop

They probably still need most of the employees

[CountValentine]

Biden admin didn’t allow many of the bigs to bid and smaller ones smelled the rat

Which major player was going to take it over without a sweetheart deal?
Easy to blame someone.

[aygart]

It is not profitable. That is why many suitors with plenty of liquid assets are not taking it over.
It is in bad shape besides illiquid.
If the government makes some suitor a sweetheart deal that would be the only possibility.

How about buying the bonds at par?

[aygart]

They probably still need most of the employees

They had an amazing sales and service team and I am sure they will be snapped up if it comes to that.