Forbes Magazine: How Trump’s Deregulation Sowed The Seeds For Silicon Valley Bank’s Demise

[Toddsterpatriot]

Wtf are you babbling about?

You don't know what a counterparty is?
LOL!

 

[Toddsterpatriot]

The standard is 3-10%. They didn’t come close

10% would have saved them? Link?

 

[imawhosure]

I want to share with you an article that explains how Trump's deregulation led to the collapse of Silicon Valley Bank, one of the largest banks in the country. The article is here: How Trump’s Deregulation Sowed The Seeds For Silicon Valley Bank’s Demise

The article says that Trump signed a law in 2018 that weakened the rules for banks that were put in place after the 2008 financial crisis. The law was called the Economic Growth, Regulatory Relief and Consumer Protection Act (S.2155), but it did not protect consumers at all. It allowed banks like Silicon Valley Bank to take more risks with their money and hide their problems from regulators.

The law was supported by most Republicans and a minority of Democrats who were fooled by the bank lobbyists. Most Democrats voted against it The Senate passed it by a vote of 67-31, with 16 Democrats voting for it. The House passed it by a vote of 258-159, with 225 Republicans and 33 Democrats voting for it. Trump signed it into law on May 24, 2018.

Now we are paying the price for this Trump law. Silicon Valley Bank failed because it gambled on risky loans and investments that went bad. It also lied about its financial health and hid its losses from regulators and investors. The bank's failure caused a lot of damage to the economy and hurt millions of customers, employees and shareholders. This is why we need to hold Trump and his allies accountable for their actions.

They sold us out to the big banks and put our economy at risk. We need to repeal this law and restore strong regulations for banks that protect consumers and prevent another crisis.

You are reaching so far, we laugh at you. It is a joke! Let us ALL remember how this works---------->Bush was blamed for 8 years of Obama failings; in fact, when Bush asked your fearless leaders about Freddie and Fannie, your heroes claimed all was well. Would you like to post what your friends said?!?!?!?!?!

Now then, you claimed after that, that Trump, (not my favorite President mind you) was bolstered by what Obama did for 8 years, lol. Never showed up on his watch, but a-ok.

Then, Biden comes in, changes EVERYTHING, and somehow after 4 years of Trump; which you claim Obama could not overcome 8 years of Bush, all of the sudden, poor Biden could not do anything, lol. 10 and 1/2 years as the head of our government out of 12, and all you can do is blame, don't you think that is pathetic!

Add to that, you tied up at the very least 2 years of your opposition with Russia, Russia, Russia. Nothing was getting done. Soooooooo, what you really have is 2 years maybe of Republicans in sort of control, which means out of 14 and 1/2 years, YOUR people have done their thing for 12 and 1/2.

You actually selling your nonsense, or are you trying to be funny so as you can get a gig on YOUTUBE? I hope it is the latter, because if you are doing this for the former, you have failed. We see you as incompetent, irrelevant, and immaterial, but keep on posting so we can all have a good laugh!

 

[Tom Paine 1949]

Trump and Republicans’ showed a deep ideological commitment to ending prior regulation of still huge “medium size” banks. The 2018 decision to partially exempt them was largely a result of this.

But too many Democrats also went along with that 2018 decision!
There is nothing new in all this …

Of course there were other aspects involved too. Even if there was better regulation and “stress tests” of these institutions, it is not at all certain that regulators would have had the courage or foresight to correct the slipshod practices made available by “easy money” to venture capitalists in Silicon Valley, or oppose the slipshod policies of these venture capitalists themselves — who managed their borrowed money irresponsibly — to stop this regional (and venture capitalist) “classic bank run.”

There's no doubt that modern radical right and libertarian obsessions (and lobbying) to downsize government oversight of big corporations is part of this problem — as well also of recent railroad disasters, quality problems at Boeing in recent years, etc.

It is good that Forbes Magazine, an obvious pro- “big business” outlet, recognized at least the problem with the 2018 regulatory roleback of the “mid-size banks” ($50-$250 billion).

But of course one of the most consistent opponents of all aspects of today’s widespread corrupting and dangerous financial malpractice and irresponsible “deregulation” has been … Bernie Sanders:

Deregulation Killed Silicon Valley Bank

Let’s be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly

www.counterpunch.org

“Credit where credit is due,” I say.

 

[candycorn]

How much "money on hand" would have saved them from a bank run?

more

 

[Toddsterpatriot]

more

$20 more?

 

[j-mac]

According to some on this board, they were still hindered and otherwise handcuffed from Trump policies two years ago.

Well, we both know that’s not true…

 

[j-mac]

1. Most of their actions were not irresponsible. They were purchasing MBSs, and that's normal. There are no regulations that require interest rate risk hedging. Yet.
2. It looks like Dodd-Frank had regulations on valuing bank assets, but that those regulations were rolled back in the last administration.
3. If management was indeed front-running, they'll probably get appropriately nailed here, and I'd be all for tighter regulations that make front-running less likely.

So, IOW, the board was more interested in making sure they had just the right make up of diversity, rather than hiring qualified people, And they tried to get cute….

 

[FA_Q2]

We always "have" to do it to protect wealthy investors. This place burns down at the mention of putting even a tiny morsel of effort into addressing the risks of being poor but addressing the risks to investors is always a "have to" priority.

Thanks for the recommendation I'll go read through that thread.

That is a rather silly thing to say in the case of bank failures. The poor are already covered, FDIC covers anything someone that can be called poor will have in the bank.

There is no 'poor' to bail out here.

I agree that we should not be bailing out and helping companies that have made bad calls or wealthy that have not secured their money but you cant say that they are not already covering the poor.

 

[Nuthin' Fancy]

Do you think 3% or 10% would be enough to keep SVB liquid when their depositors all
tried to withdraw their funds at the same time?

What I think?
It's pretty fucking obvious.

Silicon Valley Bank (SVB) was a state-chartered commercial bank headquartered in Santa Clara, California that failed on March 10, 2023, with holdings now managed by the Federal Deposit Insurance Corporation (FDIC).

 

[Nuthin' Fancy]

Which bank regulations did he eliminate?

Trump didn't eliminate any bank regulation, Trump just raised the limit on banks like SVB from $50 million in assets to $250 million, from oversight by the FDIC.
You read the article?

 

[Tom Paine 1949]

Trump didn't eliminate any bank regulation, Trump just raised the limit on banks like SVB from $50 million in assets to $250 million, from oversight by the FDIC.
You read the article?

I’m afraid it is you who did not — carefully — read the article. Trump and his party, following their obsession with de-regulating banks and financial institutions, “raised the limit on banks like SVB from $50 million billion in assets to $250 million billion” !

Also this was not by or concerning FDIC insurance, but various bank regulations and oversight provisions, “stress testing”, etc.

 

[Nuthin' Fancy]

I’m afraid it is you who did not — carefully — read the article. Trump and his party, following their obsession with de-regulating banks and financial institutions, “raised the limit on banks like SVB from $50 million billion in assets to $250 million billion” !

Also this was not by or concerning FDIC insurance, but various bank regulations and oversight provisions, “stress testing”, etc.

The Federal Reserve's stress test assesses whether banks are sufficiently capitalized to absorb losses during stressful conditions while meeting obligations to creditors and counterparties and continuing to be able to lend to households and businesses.Jun 22, 2022

Stress Tests - Federal Reserve Board​

federalreserve.gov
https://www.federalreserve.gov › supervisionreg › stress-...

 

[Nuthin' Fancy]

FDIC Releases Economic Scenarios for 2022 Stress Testing​

Federal Deposit Insurance Corporation (.gov)
https://www.fdic.gov › news › press-releases



Feb 15, 2022 — WASHINGTON — The Federal Deposit Insurance Corporation (FDIC) today released the hypothetical economic scenarios for use in the upcoming stress ...

The Federal Deposit Insurance Corporation (FDIC) today released the hypothetical economic scenarios for use in the upcoming stress tests for covered institutions with total consolidated assets of more than $250 billion.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires certain financial companies, including certain state nonmember banks and state savings associations, to conduct stress tests. In 2018, Congress increased the size of what is considered a covered institution from $10 billion to $250 billion.

The supervisory scenarios include baseline and severely adverse scenarios. The baseline scenario is in line with a survey of private sector economic forecasters. The severely adverse scenario is not a forecast, rather, it is a hypothetical scenario designed to assess the strength and resilience of financial institutions. Each scenario includes 28 variables—such as gross domestic product, the unemployment rate, stock market prices, and interest rates—covering domestic and international economic activity.

 

[bigrebnc1775]

Well, they're kept in ignorance.

Regulation is commie. Evil. Grunt. That's as deep as it gets for them.

No one can be this stupid and function. So how much are you paid to post here?

 

[Mac1958]

No one can be this stupid and function. So how much are you paid to post here?

Well, I fully admit that no one is as smart, educated or accurately-informed as an obedient Trumpster.

So you got me there.

 

[citygator]

That is a rather silly thing to say in the case of bank failures. The poor are already covered, FDIC covers anything someone that can be called poor will have in the bank.

There is no 'poor' to bail out here.

I agree that we should not be bailing out and helping companies that have made bad calls or wealthy that have not secured their money but you cant say that they are not already covering the poor.

Its a little more complex buddy. The poor dont have bank accounts to lose. They need support in other ways, healthcare, education, infrastructure. But those things are off limits to one of the parties but saving rich peoples savings are no problem for both parties.

 

[Dragonlady]

If you write a crappy mortgage and hold it, you lose money.
If you write a crappy mortgage and sell it, the buyer loses money.
Either way, somebody loses money. Enough people lose enough money,
even good mortgages can end up going bad.

And THEN the same people that did that were allowed to bet AGAINST those mortgages

Who was their counterparty on those bets?

Your post makes no logical sense, but I consider the source. Your economic posts have never made sense. You know the lingo, but not the substance.

The SVB wasn't in the business of writing mortgages. They're in the business of financing tech start ups. Boutique banks which cater to one sector of the economy are vulnerable when there's an economic downturn in their sector. This bank made some bad decisions and handled everything badly after lobbying vociferously for deregulation.

I commend Biden for refusing to bail out the shareholders. The era a private profits and public losses are over.

 

[Toddsterpatriot]

What I think?
It's pretty fucking obvious.

Silicon Valley Bank (SVB) was a state-chartered commercial bank headquartered in Santa Clara, California that failed on March 10, 2023, with holdings now managed by the Federal Deposit Insurance Corporation (FDIC).

What I think?
It's pretty fucking obvious.

Spell it out. Is 3% enough? 10%? How much is enough?

 

[Toddsterpatriot]

Your post makes no logical sense, but I consider the source. Your economic posts have never made sense. You know the lingo, but not the substance.

The SVB wasn't in the business of writing mortgages. They're in the business of financing tech start ups. Boutique banks which cater to one sector of the economy are vulnerable when there's an economic downturn in their sector. This bank made some bad decisions and handled everything badly after lobbying vociferously for deregulation.

I commend Biden for refusing to bail out the shareholders. The era a private profits and public losses are over.

Your post makes no logical sense,

Not to an idiot like you.

The SVB wasn't in the business of writing mortgages.

I didn't say they were, moron.