SVB Failure

The banking system's version of a train derailment. 

Regulation doesn't kill business. Business kills business ??

Lobbying doesn't kill regulation. Lobbying kills companies ?? 

Lobbying for, and getting, less regulation a couple years before the collapse.

Silicon Valley Bank Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

“This was a 100 percent avoidable problem,” economist Dean Baker told The Intercept in an email, pointing to the Dodd-Frank repeal bill. “That bill raised the asset threshold above which banks have to undergo stress tests from $50 billion to $250 billion. SVB would have been required to undergo regular stress tests before the revision; among the stresses you look at are sharp rises in interest rates, which is apparently what did in SVB. Presumably, if its books had been subject to this test, the risk would have been detected and they would have been required to raise more capital and/or shed deposits.”

 

Brad Delong on the Clean Up

Saturday Night Thoughts on the Need for a Lender of Last Resort

 

Taking care of the wealthy. 

Insider selling and bonuses paid out at the last minute. 

Apparently, Peter Thiel got his money out before the run, imagine that!?

SVB paid out bonuses on March 10

also,... 

FDIC Takes over.

Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-799-0959

These calls should be made public. 

I wonder if it'll take an hour for a human to pick up the phone like the last time I called the IRS or Treasury?

More about the FDIC takeover here:

RIP Silicon Valley Bank: Shut Down by California Regulator, Taken Over by FDIC, Shareholders Bailed In, Insured Depositors to Get their Cash by Monday

Contagion

May not spread through the US banking system but seems to be spreading around the world's start-ups and venture capital firms.

Silicon Valley Bank fallout starts to spread around the world

Israeli start-ups are in for a rough ride after SVB collapse, experts warn