Silicon Valley Bank Bailout vs. Student Debt Reduction

[mcsluggo]

On 3/13/2023 at 10:58 AM, Fergasun said:

They are bailing out depositors over the $250k limit, not the bank.  Per the press release, any losses will be assessed to other banks (not sure if legal.... the other banks may challenge).

 

So think of it like the other banks pulled a bad community chest card.

 

FDIC (insurance) covers the losses.  as a result the cost of insurance rises for all banks in the future... banks can choose not to use DFIC insurance, ...i suppose.... but they will probably have to do it in another country

[mcsluggo]

1 hour ago, PleaseBlitz said:

Starting to think we shouldn't let banks be publicly traded. 

 

you can have completely safe commercial banks (and keep investment banks a separate category) by keeping them boring.   they have to be conservative (actually conservative... not what the "conservative" party of the United States thinks "conservative" means... you don't have to make the banks hate mexicans and queers... you don't have to make the banks concentrate on triggering woke cucks...)   you have to make banks keep more capital, rely on more stable funding sources (like insured deposits), not be allowed to make as risky investments, and be subject to greater regulatory oversight and stress tests.   Canada has a boring financial sector... and 2 banks have failed in the last 150 years or so.   In the case of banking (bedrock commercial banking), boring is good.   but this means that the returns need to also be boring, which SHOULD lead to boring (non-extravagant) compensation packages for bank executives.

 

you can have more risk loving investment banks (like goldman, etc...) regulated differently.... but they still have to be strongly regulated, and here are going to be failures THERE, and you have to be prepared with what unravelling those messes will entail.    But you can't have every community bank prez looking longingly at the NY banks and trying to inch their way in that direction every time there is an economic boom and interest rates are low.   You HAVE to keep them reigned in ... which means you cannot have one party constantly reducing the regulation and oversight on banks every time they take control of the government.....   

 

you have to keep adults in control of government  (cue a return to the "debt ceiling" theatrics......)

[PleaseBlitz]

19 minutes ago, mcsluggo said:

 

you can have completely safe commercial banks (and keep investment banks a separate category) by keeping them boring.   they have to be conservative (actually conservative... not what the "conservative" party of the United States thinks "conservative" means... you don't have to make the banks hate mexicans and queers... you don't have to make the banks concentrate on triggering woke cucks...)   you have to make banks keep more capital, rely on more stable funding sources (like insured deposits), not be allowed to make as risky investments, and be subject to greater regulatory oversight and stress tests.   Canada has a boring financial sector... and 2 banks have failed in the last 150 years or so.   In the case of banking (bedrock commercial banking), boring is good.   but this means that the returns need to also be boring, which SHOULD lead to boring (non-extravagant) compensation packages for bank executives.

 

you can have more risk loving investment banks (like goldman, etc...) regulated differently.... but they still have to be strongly regulated, and here are going to be failures THERE, and you have to be prepared with what unravelling those messes will entail.    But you can't have every community bank prez looking longingly at the NY banks and trying to inch their way in that direction every time there is an economic boom and interest rates are low.   You HAVE to keep them reigned in ... which means you cannot have one party constantly reducing the regulation and oversight on banks every time they take control of the government.....   

 

you have to keep adults in control of government  (cue a return to the "debt ceiling" theatrics......)

 

 

Yea, they did what you suggest in your first paragraph with Dodd-Frank.  The GOP unwound it the first chance they had.  

 

I'm just trying to think of ways that limit bank failures to the bank that failed.  Agree completely about IBs.