Banks Failing: Is It 2008 Again?

[Abey]

https://twitter.com/Milton_FMR/status/1637500754528182272

On track for banks to be nationalized infrastructure and opportunities for individual success dwindle

[Abey]

https://www.bloomberg.com/news/articles/2023-03-19/new-york-community-bancorp-said-to-pursue-deal-for-signature

Done deal https://www.wsj.com/livecoverage/stock-market-news-today-03-20-2023/card/fdic-says-new-york-community-bancorp-subsidiary-to-assume-signature-bridge-bank-deposits-TH55IjXbE3F9J6DqBxoO

[AsherO]

Not sure I’ve seen the Signature crypto angle discussed in this topic:

https://www.wsj.com/articles/signature-banks-crypto-execution-c707bb48

[chevron]

Some people gain a lot by just getting attention to all of their doomsday stuff.

Chase, boa etc the boring banks have mostly small depositors.. the under 250k

First republic has hni clients with massive capital .

This is what I'm confused about. If you have a lot of capital that is not insured, you should be focused on your bank

[dealmaster]

Chase, boa etc the boring banks have mostly small depositors.. the under 250k

I’m not sure where you got that info from, pretty sure both your examples boast a lot of hni with huge accounts as well as small guys too

[aygart]

Some people gain a lot by just getting attention to all of their doomsday stuff.

Chase, boa etc the boring banks have mostly small depositors.. the under 250k

First republic has hni clients with massive capital .

This is what I'm confused about. If you have a lot of capital that is not insured, you should be focused on your bank

Instead they would need to worry about chase shutting them down for no reason.

[ExGingi]

A good thread (click to read entire thread) in plain Hebrew (posting just because I came across, if someone comes across an English equivalent, please post) of the CS situation/fiasco and its broader implications.

https://twitter.com/ciitay/status/1637779227314462722

[Abey]

Some people gain a lot by just getting attention to all of their doomsday stuff.

Chase, boa etc the boring banks have mostly small depositors.. the under 250k

First republic has hni clients with massive capital .

This is what I'm confused about. If you have a lot of capital that is not insured, you should be focused on your bank

Jpow and yellen find it important to issue a statement Sunday afternoon about a bank in Switzerland, the White House is promising all kinds of goodies to Buffet if he bails out the regional banks rather then having FDIC do it. But sure I’m very calm that FDIC is insured 😝😝😝
The Fed, regulators and the White House messed up big time here and while I’m not doomsday and we will be fine in the end, we are in a lot of trouble for the short term…

[Abey]

An interesting point made on the All in podcast (which I’d recommend for good explanations on this crisis) is that at minimum regulators should’ve had a live MtM dashboard to live stress test bank assets. What do you think @holtkup ?

[Yehuda57]

An interesting point made on the All in podcast (which I’d recommend for good explanations on this crisis) is that at minimum regulators should’ve had a live MtM dashboard to live stress test bank assets. What do you think @holtkup ?

Isn't that done for the larger banks? The threshold for "larger" banks was raised significantly thanks to lobbying from banks like SVB.

[haltkup]

An interesting point made on the All in podcast (which I’d recommend for good explanations on this crisis) is that at minimum regulators should’ve had a live MtM dashboard to live stress test bank assets. What do you think @holtkup ?

Isn't that done for the larger banks? The threshold for "larger" banks was raised significantly thanks to lobbying from banks like SVB.

Agree MTM is extremely important to evaluate liquidity & cost of liquidity. I have made similar arguments to rating agencies back in late 2020 on this topic differentiating ALM and liquidity. Stress test would not pick up the risk, because it focuses on recessionary environment with lower GDP higher unemployment etc. which includes rates decreasing.
https://www.wsj.com/articles/stress-testing-wouldnt-have-saved-silicon-valley-bank-fomc-federal-reserve-treasury-bank-run-signature-bank-1573ab77?cx_testId=3&cx_testVariant=cx_170&cx_artPos=2&mod=WTRN#cxrecs_s

[theyankel]

Life insurance companies Have ratings - Do you just go to any company with the best price? why should consumers not have to do some due diligence when they go to a bank? Banks have ratings too - I don't see why a consumer cant be required to look out for bank ratings..

before depositing in a bank, did you ever check the bank's capital reserve? the bank's credit rating? investment profile? read their quarterly statement?
first we're all experts on the measles, then internal medicine (covid/masks), and now we're a country of 300,000,000 economists... some of whom walked to the corner and opened a bank account because thats where it was convenient and they got a toaster

[yelped]

I don't understand these things, but how did they overlook the "fact"(?) that bondholders come before stockholders when deciding to wipe out their equity first, and why did they do that?

https://www.cnbc.com/amp/2023/03/20/17-billion-of-credit-suisse-bonds-worthless-following-ubs-takeover.html

[gubevo18]

I don't understand these things, but how did they overlook the "fact"(?) that bondholders come before stockholders when deciding to wipe out their equity first, and why did they do that?

https://www.cnbc.com/amp/2023/03/20/17-billion-of-credit-suisse-bonds-worthless-following-ubs-takeover.html

see Matt Levine today

[ExGingi]

I don't understand these things, but how did they overlook the "fact"(?) that bondholders come before stockholders when deciding to wipe out their equity first, and why did they do that?

https://www.cnbc.com/amp/2023/03/20/17-billion-of-credit-suisse-bonds-worthless-following-ubs-takeover.html

Apparently AT1 bonds have special provisions. It doesn't make sense to you, to me and to many others, but the regulators probably have some backing. You can also be sure that legal teams are at work right now about this.

[Joe4007]

An interesting point made on the All in podcast (which I’d recommend for good explanations on this crisis) is that at minimum regulators should’ve had a live MtM dashboard to live stress test bank assets. What do you think @holtkup ?

FWIU, the stress tests currently in place were designed coming out of the GFC and test for credit risk (loan defaults), not duration risk (interest rates rising). SVB and Signature would've passed those tests.

[Abey]

FWIU, the stress tests currently in place were designed coming out of the GFC and test for credit risk (loan defaults), not duration risk (interest rates rising). SVB and Signature would've passed those tests.

what i posted is not a stress test, its live MtM data not a point in time. But agree every crisis will be different risks... But seems negligent not to have that data when we know what rising interest rates mean for assets

[ExGingi]

https://twitter.com/ciitay/status/1638077868906299393

[aygart]

https://finance.yahoo.com/news/signature-bank-deal-fdic-left-135604132.html

[ExGingi]

https://finance.yahoo.com/news/signature-bank-deal-fdic-left-135604132.html

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