Fed should have mandated bigger reserves and done better stress testing before raising interest rates so fast. Anything long duration tanked like 20% in mark to market value.
SVB is probably not the last shoe to drop in this story.
SVB is probably not the last shoe to drop in this story.
Not an expert in this area but when distilling everything I understand about this topic, it seems like big banks (too big to fail?) collude with the federal reserve to rob smaller banks (of clients and value) using interest rate games and these "requirements" every x years.
If anyone has an explanation as to why that's a wrong conclusion, please share.
>this case will be a case study for years to come, and will effect change in FDIC's requirements.
I'm only at the position where I see this conspiracy without squinting because I remember the last time this happened, responsible solvent small banks were, thanks to regulation, pushed under or taken over by the larger irresponsible banks.
I have a feeling the environment (requiring malinvestment followed by rapid rate raises) is set so that the next set of regulations will do the same and further kill smaller banks. It doesnt seem like a side effect but rather the intent of the chaos that a few large banks guide or are privy to (through lobbyists, fed insiders, etc...) before it occurs.