SVB chief pressed lawmakers to weaken bank risk regulations | Hacker News Reader

SVB chief pressed lawmakers to weaken bank risk regulations

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200 pointsyoelo93 comments

Regulatory capture, it's called. Man, it does a lot of damage.

Long ago I and colleagues opened accounts at SVB for two different outfits with VC money. It was simply the thing to do when getting started converting that money into software that would then produce lots more money.

It was simply the thing to do. We didn't have CFOs. We knew darn well our deposits would exceed the household-banking FDIC insurance limit. It would have seemed a brutal waste of very precious time to do an independent background check on our banks.

Look, friends, the rule of law is what makes it possible to do business. If we lowly startup entrepreneurs can't trust institutions like banks reliably to provide their services, and we can't trust the government to do their part in maintaining that reliability, who can we trust? Are the next YC classes going to get their financing in Krugerrand gold coins? Are they going to need to look for safes on EBay along with the other gear they need to make the magic happen?

Lowly? Yeah. Compared to banks, governments, infosec certification people, even landlords and vendors? Yeah. Lowly. We have to be able to trust our environment at least a little bit to succeed.

This regulatory capture is freakin' ridiculous and has to come to an end.

Startups have to do risk management all of the time -- it's a core activity of entrepreneurship. Can we trust this vendor? Is this new hire going to work out? Will this API vendor scale to what we need/be around in the future?

Finance is no different. There are no "safe" investments, only varying levels of risk and reward. Mitigating the risk of a single bank failure locking up your $2MM raise is a couple hours of work. Only you can say whether mitigating that risk is worth the effort.

Putting money in a bank is risk management.

Respectfully, it's not. Choosing a bank is an aspect of risk management, the act of throwing all your money into whatever thing that calls itself a bank and is most convenient is not risk management, it's risky behavior.

Risk management would be asking the question "should I be putting all my eggs in a basket that seems very tied to the tech economy / northern California real estate market / low interest rates?". Diversification would be trying to get the money you use to pay your tech workers invested in something as far away from tech as possible.

Putting money in a bank is a form of risk management. A startup can choose to:

* Buy expensive office equipment or put it in a bank

* Go on a hiring spree or put it in a bank

* Acquire another company or put it in a bank

* Put money in crypto or put it in a bank

Shopping for a bank might mitigate a bit more of your risk. Putting it inside of a bank is low risk compared to the many things you can do with money.

Hundreds of thousands of businesses store more than $250k in a bank and for most of them, the largest risk to their business is not their bank.

> Regulatory capture, it's called. Man, it does a lot of damage.

It's not regulatory capture. It's plain and simple deregulation. It's the end result of all the people arguing that "federal regulations only slow innovation. Deregulate so we can be more efficient and profit."

There were regulations in place, there were a group of people who like to get rid of regulation. They obliged. They weren't captured, it's practically their platform.

At somepoint people will realize two things. We all live in a society together and thus need regulations to govern actions and interactions.

These regulations are societal insurance. Yes you pay a little bit yearly that you could've used elsewhere for your profit, but they are necessary to avoid the contaigen when disaster strikes.

The thing is, it isn't "people" arguing that -- to an extent that would suffice influence policy, in any case. By itself, this belief contingent (and its effect on public policy) would be quite marginal.

At the end of the day, it's lobbyists, PACs and think tanks connected to specific business interests who are able to work the system, and get these marginal political beliefs converted into legislation (and court appointments).

That's how the term "regulatory capture" applies.

And they convince millions of people it’s the right thing to do, so they keep getting voted in on it. It appeals to existing political mindsets. You can’t ignore the politicalization of it.

That's exactly how they operate - by trying to convince everyone that it's the inevitable result of the groundswell of public opinion in favor of aggressive regulation.

In reality, it isn't.

> to convince everyone that it's the inevitable result of the groundswell of public opinion in favor of aggressive regulation.

This wasn't aggressive regulation - it was removing regulation. Again, regulations would have helped.

The same things we've learned since the 1930s still apply. And when someone rolls back those regulations under claims it's "stifling profit or innovation" we end up in the same spot.

Typo: meant to say deregulation, of course.

> The thing is, it isn't "people" arguing that -- to an extent that would suffice influence policy, in any case.

You also seem to be discounting the fact that plenty of people (for example influential people in SV) have spent a lot of time arguing that regulation is in general bad. That spreads here on HN quite frequently. This is the outcome of that rhetoric.

There is also a political part that champions it, they've and a large part of the voting public believes this. It's not just a few small lobbyists that twisted politicians arms on behalf of their clients. There are politicians looking for places where there are regulations so they can cut them as that's a key part of their platform. People suggest areas and they agree.

You keep making it sound like the concept of cutting regulations is political heresy across the board and lobbyists are having to sneak to get these done. It's widely promoted in a certain sphere and this is what it results in.

> If we lowly startup entrepreneurs can't trust institutions like banks reliably to provide their services, and we can't trust the government to do their part in maintaining that reliability, who can we trust?

Oh great, another entrepreneur crying "Woe is me".

Consider that your lowly regular employees have to make far more specific financial decisions every single year.

- We have to choose health plan options that will govern our and our family's literal lives over the next year

- We have to make specific retirement plan elections and understand market risks because our actual lives after retirement age depend upon them, since there are no such things as pensions any more

- We have to figure out the tax implications of all of the above, which intersect in odd and complex ways ways (Why is my health plan linked to a tax-free retirement account, again? Figure it out!)

- In addition to all this, if we ever happen to hold more than 250k in cash, we have to worry about the exact same thing here.

Seriously though, if you do actually think that figuring all this risk out is a waste of money as a founder, make sure you provide optimization guides for your employees that go into details about optimizing the complex financial decisions that you make them do every year. Working on that might open your eyes to also looking more carefully at the institutions you bank with.

> This regulatory capture is freakin' ridiculous and has to come to an end.

True. But this is also true of all the stuff I mentioned earlier, especially taxes. Regulatory capture hurts lowly employees far worse and far harder than it hits entrepreneurs. Fixing one will help fix the other.

I'm certainly not crying "Woe is me." Not at all. SVB, and other parts of the business, worked out very well indeed for us and our employees. Did scramble to make payroll a couple of times, but that was nothing to do with SVB. Why did we scramble to make payroll? Because employees, including founders, needed to feed our families etc. And, yeah, laws against stealing wages and all that. Basic honesty in business sometimes means taking personal risks.

An investor / board member back then said "don't worry about it" when I brought up FDIC coverage limits upon their advice to dump the money at SVB.

At any rate last Sunday the FDIC knuckled under to pressure from the Sand Hill Road folks and extended their insurance to all deposits, not just the first quarter megabuck owed to each depositor. SVB's shareholders are wiped out, and maybe some non-depositor people they owe money to will take a haircut. But the various startups will be OK.

I want to have sympathy for the depositors, but it is hard to knowing that they chose to keep their funds in an bank that was actively lobbying to weaken risk regulations.

There multiple products that would help in this situation, such as insurances and virtual accounts that split between multiple FDIC accounts/banks.

Bailing out these depositors would send the wrong message and encourage moral hazard, i.e., the belief that someone else will always bear the costs of risky behavior. Educating entrepreneurs and investors on the importance of diversification, due diligence, and risk management would create a more resilient and sustainable innovation ecosystem, where success is based on merit and hard work, not on cronyism or government intervention.

"Privatize profits, subsidize losses."

It's the global economy way!

Hint: nothing will change, depositors and banks will get bailed out. Water is wet.

SVB isn't getting a bailout. That company is gone. Their shareholders lost everything they invested.

Depositors don't get bailouts. That's not what bailouts are.

If taxpayers help wealthy depositors get more than their insured amounts, (and more than a normal liquidation of assets) that is a bailout

It may or may not be the right thing to do, but it most definitely is a bailout.

Yes that's reasonable. That's probably not what's happening here. In some ways, the _promise_ of the FDIC getting depositors almost all their money back is enough.

The biggest problem people have right now is time. Over time, everyone will probably get most of their deposits from SVB back from SVB assets.

What people (the ones who know what they're talking about, anyway) are asking for is closer to taxpayers covering the costs of getting that money back sooner. There's a definite cost, but it's not taxpayers writing checks to cover deposit values.

> Over time, everyone will probably get most of their deposits from SVB back from SVB assets.

> What people (the ones who know what they're talking about, anyway) are asking for is closer to taxpayers covering the costs of getting that money back sooner. There's a definite cost, but it's not taxpayers writing checks to cover deposit values.

Except it's literally asking the taxpayer to cover the costs to cover these funds for some indeterminate period of time in the HOPES that SVB will "probably" be able to make their depositors whole, someday.

I think that's what I said?

There's a cost, we don't know what it is. It's not as high as it sounds when you say "we should only let people get $250k liquid and everyone else should pound sand".

The cost to letting these companies keep their money tied up is a lot of people not getting paychecks. Which suddenly means no tax witholdings. And more unemployed people. And companies that can't pay vendors.

Doing nothing is not free. It might be cheaper, it might not. I get the instinct to hold the man accountable but it's not as simple as most people are suggesting.

But why can their investors not cover the costs? Surely the same VCs who lent the startups money can lend them some more for the short period until SVB's assets valuation gets sorted out? Aren't they the ones to lose most if the startups go down under?

> Bailing out these depositors would send the wrong message and encourage moral hazard

This seems to be the way the financial system has operated in the last 20 years. So I’d expect a bailout.

Also, SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world. They are going to leverage their power and influence to recover as much as they can as quickly as they can.

> where success is based on merit and hard work

That’s the lie we all want to believe, but reality is that people at the top are a small club that will always prefer their family/friends/network than some hardworking rando from “the outside”.

You are far more likely to be successful (money/career-wise), if you are born into a well off, well connected family, than if you are born poor but super hardworking.

> Also, SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world. They are going to leverage their power and influence to recover as much as they can as quickly as they can.

All the more reason regular people need to be screaming to high heaven that those rich and powerful people will get eaten if they push for and eventually receive a bailout.

There's no bailout. SVB is dead. People are pushing for depositors to get their money back. Which is, I think, reasonable.

Putting your company money in a bank account should be safe. We should regulate banks like SVB to make it more safe. We should also make sure when the regulations fail the people who use a bank, they can continue doing business.

depositors are only entitled to what is left over after resolution of the assets, nothing more! dont make this situation worse by advocating for something unethical and which is bad for the entire system

Why does FDIC insurance exist at all?

In the general case, it acts to prevent bank runs triggered by individual depositors.

SVB is a special case -- a bank focused on commercial customer base.

To provide safe haven for the vast majority of people/orgs whose cash assets can fit in that bucket, since there's some scale at which you can't afford the overhead of privately managed risk management (diversification, private insurance, etc). It provides stability on the low end, especially for naive and casual wealth, so that their naivite doesn't cause problems for everyone else.

But above that bucket, people/orgs are expected to know and appropriately manage the risks that they're taking with their money or have the float to pay someone who does.

Experienced money doesn't see large bank deposits as safe by nature because they never have been. It's only people new to wealth and chronically blind to tail risk (hello startup industry!) that assume a $5M portfolio can be treated as casually as their personal checking account.

Of course, that is likely what they're getting. People with sub-$250k will be taken care of by the FDIC as expected and the $250k+ depositors will be made whole from the proceeds of asset sales (bonds, securities, et al) held by Silicon Valley Bank. I really don't think the U.S. government will step in to provide additional funds.

It's also possible that the FDIC might sell the remnants of Silicon Valley Bank to a larger bank that will assume all deposits.

> I really don't think the U.S. government will step in to provide additional funds.

If it was some small bank that was only impacting “regular people”, then probably the government would not do anything.

But that is not the case here. The depositors of SVB are very wealthy and powerful. Also the standard process of selling assets is too slow, and that delay could create a catastrophic domino effect. Famous investors are already calling for the government to fix the issue within 48hrs.

Maybe the government will step in as a temporary lender, letting depositors borrow against their deposits, which they will eventually get back.

Every bank account in the United States is insured up to $250,000 by the FDIC. I have zero sympathy for these depositors who decided it would be "too costly" or "too much hassle" to split their deposits into multiple accounts.

If you've got $25,000,000 dollars at SVB, you need 100 accounts. This is not rocket science. I really hope that they find a buyer to make depositors whole but if one cannot be found why should the public reimburse depositors for more than 250K simply because they were too cheap to hire a couple of accountants to manage it?

I don't expect everyone to essentially game FDIC insurance. And not sure if that is even possible or wanted.

But doesn't mean it is unreasonable to expect people with this level of cash funds not to have more than one egg basket. Split it in two, three or four. One goes down, you still have money locked up but can use other accounts to take care daily operations and possibly mitigate some of the issues.

Incorrect.

Every depositor has 1 account per account type per institution insured up to 250k.

If you had 100 accounts of the same type at the same institution, you're still only getting 250k back from the FDIC.

To do what you're proposing, you'd have to have 100 accounts at different FDIC insured institutions. The logistics there is vastly different, but meshes quite well with designing for fault tolerance/resilience.

Brex offers a product to do this for you IIRC?

It is a bailout for any amount over $250,000

$10mm of deposits at SVB is worth way more than $250k. We don't know exactly how much though. That money didn't just vanish, it got tied up in ways that make it hard for depositors to withdraw it.

So no, it's not a depositor bailout for everything greater than $250k.

It’s really not. They have assets.

> Also, SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world

Not anymore!

Even if you end up getting back "only" 250K USD, you end up being in the 1% of the world when it comes to wealth. That sort of cash is really not "normal" or "common" to have in a bank account, in the world at large. Looks differently in concentrated high-wealth areas like Silicon Valley of course, but still plenty of wealth compared to the rest of the world.

That's an incredibly normal amount for a business. That's one payroll cycle for ~50 people making $75k per year each.

Sure, in the context of the US (and specifically Silicon Valley), but context was "SVB depositors weren’t just random individuals, they are some of the wealthiest people and organizations in the country or even the world"

I think it's a mistake to equate simply having an amount of wealth in the 1% worldwide having any significant power or independence. It's basically something of a non-sequitur ignoring what that wealth gets you in context.

> prefer their family/friends/network than some hardworking rando

this is naive and badly mistaken. This kind of criticism on a very large scale is exactly the driver the flavor of business today; constant, ruthless and formula-driven partnerships taking control and demanding new 'opportunities'.

Are you aware of all the lobbying your current bank does? Seems an unreasonable expectation.

I´m not, but I do expect sophisticated companies such as Roku to do better risk management than me.

If this was just Roku money, I doubt there would be an uproar. This hit a lot of very small startups with, like, $2mm and 14 months to live. These are not sophisticated companies.

Setting aside whether or not the due diligence is to be expected, early-stage startups are in no position to do it, so they listen to their VCs.

There's solo freelancers that run things through their LLC as well. It's not just all fat cats for sure.

> it is hard to knowing that they chose to keep their funds in an bank that was actively lobbying to weaken risk regulations

what an insane standard. as a customer of any company I'm now supposed to investigate their lobbying activity? what else do I need to do due diligence on?

If you loan someone millions of dollars, yes you should probably do some diligence on them.

(The limitless extrapolation of HN never ceases to amaze)

Agreed. They put their money in a regulated bank that's an FDIC member. Banks are a bit like the US airline in that they're heavily regulated, how they treat you and the fees the charge are all over the place, but they're all safe.

SVB was the place investors told companies to put money. SVB was also somewhat difficult to work with, they created a tremendous amount of pressure to do all your banking with them.

And SVB didn't have products that would help you maximize FDIC insurance.

It wasn't exactly predatory, but they set everything up to leave everyone very exposed to SVB issues. I think on purpose, just to maintain power in the ecosystem.

> Bailing out these depositors would send the wrong message and encourage moral hazard, i.e., the belief that someone else will always bear the costs of risky behavior.

Totally agree, and this is what makes me so furious. On one hand, you have all these business leaders demanding fewer regulations because they're "costly", but then when shit hits the fan suddenly everyone, from congresspeople on both sides, to billionaire investors and tech leaders, is crying on Twitter how it's the "end of civilization" if they don't get a bailout.

The whole purpose of things like insurance and regulations is so that you can plan for disasters before they occur. If political pressure can ensure a bailout regardless if depositors are over the FDIC limit, than we should just drop the pretense of there being "uninsured deposits" and demand that depositors pay for insurance, regardless of their deposit amount, up front.

At the very least they need laws in place so they can claw back money from those who took advantage of loose regulations (or prosecute egregious cases). The CEO of SVB sold millions of stock 2 weeks before it collapsed. He better be first in line to return money to make depositors whole if there is a bailout.

So sick of this "heads I win tails you lose" BS.

> Touting “SVB’s deep understanding of the markets it serves, our *strong* risk management practices”

(Emphasis mine). According to other news [0] they did not have a formally appointed chief risk officer for eight months. While having a puppet CRO is obviously not a sufficient condition to ensure "strong risk management", having a well staffed and - as much as possible - independent risk management department is widely considered best practice [1]. In this instance such an internal body would get on high alert and run scenario upon scenario and stress test as soon as the inflation/interest rate environment changed.

[0] https://fortune.com/2023/03/10/silicon-valley-bank-chief-ris...

[1] https://www.bis.org/basel_framework/chapter/SRP/30.htm

Note that the 2015 lobbying was done by Greg Becker in person. Money quote is at the end:

> In 2019, Becker was elected to serve on the board of directors at the Federal Reserve Bank of San Francisco. Becker left the board on Friday.

https://news.ycombinator.com/item?id=35105048

> This is normal. The CEOs of major regional banks are required by law/regulation to be a director at the regional fed. As he is no longer CEO of a regional bank (it no longer exists) he no longer has the seat.

Every meaningful financial scheme is the same. Borrow more money than you can be asked to pay back, and gamble it heavily. This is the only way to make money without doing any work. It's theft, very simply, but its hard theft to detect.

This theft is made more difficult to efficiently regulate when a blacklist style bottom up approach to regulation is used. If I have to evaluate every investment strategy that calls itself a bank for hidden leverage, I'm guaranteed to miss some. Its a hard game to play, and investigators are humans with both the capacity to make mistakes and be corrputed.

This is further dynamically complicated by the fact that the government is the insurer of last resort in a lot of these cases. The FDIC was instituted in response to what happens in the absence of government intervention (the great depression), and it doesnt really stop there. The federal government has the authority to bail out overleveraged "banks" that fail, and banks know this, leading them to seek out even riskier (more correlated) investments.

If we cannot consistently identify hidden risk, we need to be taxing the shit out of leverage. We are the ones who are going to be on the hook when the dam breaks, and they file a claim. so we should set the price of the premiums.

Prior to joining SVB, CEO Gentile was CFO for Lehman Brothers GIB - https://news.ycombinator.com/item?id=35110431

He left Lehman Brothers 1 year before the 2008 collapse so I don't think you can connect anything here.

The seeds of Lehman’s collapse were planted years before its eventual collapse. Pushing the envelope as far as one can get away with (literally) seems to be the key to success as a banking executive.

Funny, I come to the exact opposite conclusion given that information

How we get bipartisan corruption:

• Lack of public financing for political campaigns.

• Lesser of two evils thinking, where each party gives their own politicians a pass because "the other side is worse".

• Corporate consolidation of the news media, where the culture and even the personnel of reporting and politics are interchangeable.

• "Success" (AKA greed is good) as a national ethos, with no pushback from religion, since the dominant US Christianity has somehow (is there anyone more anti-capitalist than Jesus?) been captured by amoral business interests.

Regulatory capture isn't the same thing as corruption. In cases like this and the Boeing 737 MAX, the systems are too complex to regulate without some amount of insider input. The problem is it's hard to tell when the input is constructive and when it trades off safety.

"Two months later, SVB added former Obama Treasury Department official Mary Miller to its board"

"Around that time, federal disclosure records show the bank was lobbying lawmakers"

"Virginia Sen. Mark Warner (D), for whom Becker held a fundraiser at his Menlo Park, California, home in 2016, according to an invite obtained by The Sunlight Foundation and OpenSecrets. The bank’s political action committee also donated a total of $10,000 to Warner’s campaigns in the 2016 and 2018 election cycles."

The "insider input" is money.

Overengineering is a choice. You can take the slower way, with fewer points of failure, and while you can't (or might not even want to) always stop people from trying to a build a faster solution, you CAN make them pay for the real cost of any adverse incidents which occur under their aegis. If the ship is already burning, you treat the passengers (within reason) and you fine the carrier; you don't bail the latter out, on the promise that they'll make the former whole.

The very paradigm of allowing these entities to lobby their way to private profits and socialized losses is indeed corruption.

Evangelical Jesus is the Profit.

Always the same story with these guys...

So gradually it's all opening up. The scams at those levels are most impacting one to people. I only see more fallouts in future.

It's amazing how post 2008 nothing was learned by US and pretty much no major bank but top 10 is expected to have more than 5/10% of cash-like collateral of deposits.

In Europe, no single bank is allowed to have less than 100% collateral of deposits, not one, and yet they manage to make good money and profits nonetheless.

EU only has 4 of the top 50 banks by market cap. the us has 10. I'm not saying the us system is necessarily better, but for two economies that are comparable in gdp, that's a big gap.

https://companiesmarketcap.com/banks/largest-banks-by-market...

Having a hard time finding any numbers about it, but how many banks fail in the US compared to Europe? And once they fail, how long time does it take to give people the money they are guaranteed via the insurances?

Supposedly, many countries in Europe require banks to have at least 100% collateral of deposits, this should mean resolution in the case of failure be much easier + bank runs less likely to happen, as people can feel safer that their funds actually exists in the bank is liquidity. Unless the bank is operating fraudulently that is.

how did it come to pass that the more concentrated a sector the better?

the exact opposite is true. excessive concentration means an oligopolistic or oligopsonistic sector that is holding everybody hostage: clients, employees and the political / regulatory system at large

adulation of "bigness", if not with ulterior motives, is naive

Yes, the US financial system allows bank to have more ways to make money. And lose it.

US is also the investment capital of the world, so it's quite unsurprising.

Which do you value more[1] in your jurisdiction: a larger market cap for banks, or having 100% coverage of depositor funds? Its no contest from my point of view.

1. Indirectly - which group do you value more: investors or depositors?

AIUI, both the EU and the US primarily rely on Basel III for regulations, which means there's no meaningful difference in collateralization requirements of banks.

Okay, there is one meaningful difference: larger banks have higher requirements, and since the US banks tend to be larger, that means that the US tends to have higher requirements than the EU...

There's another, more meaningful difference: In the EU, all banks are subject to Basel III. In the US, only large, international ones are.

SVB wasn't.

> When the Fed implemented Basel III in October 2020, they took advantage of the fact that strictly speaking, the Basel Accords are only internationally agreed to apply to “large, internationally active” banks. While most jurisdictions apply the Basel rules to their entire banking system anyway, the US has a strong and powerful community bank lobby, and US community banks are usually quite aggressive in their use of the borrow-short/lend-long business model.

https://www.ft.com/content/c95e7708-b903-405d-a017-963844eb3...

Does the EU require 100% _liquid_ collateral? Because European banks are also at risk from bank runs. Any bank that makes loans is.

SVB (probably) more than 100% deposit collateral. It just lost value very quickly.

This is a situation when the board should give the CEO a presentation box with a pistol and one round of ammunition, walk out, lock the door, and wait for the bang.

with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto.

IMO - almost all the leveraged finance in the last 20 years is already over-the-top and mostly "fake money".. who gets the axe first is politics. Supporting statement to this heresy? When the "real economy" tanked due to covid-19 lockdown, the paper tigers of Bloomberg continued to gain wealth, not a little, a lot. Where does that come from? ad sales alone? Oil and Gas Arab cash leveraged out into a hundred counter-parties with big names? Whatever the "technical" explanation.. lots of musical chairs games are up today. cheers

edit cannot help but pile on here.. Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf

> Roku (who I have never heard of as a consumer)

Roku's been around for a very long time building decent streaming boxes for TVs that don't cost too much. I've been a customer since Netflix started streaming.

I only know about Roku for three reasons.

I had to work on third party software supporting their boxes nearly eight years ago.

They were a meme stock for a bit. I made a small profit since I bought a few shares after I first learned about them.

And some eng director there randomly added me on LinkedIn years ago.

I would have never encountered them as a regular consumer, because I don't watch TV or use any streaming services.

It's hard to take your analysis seriously with no knowledge of Roku, a major brand who has existed for a very long time.

Why? Why don’t you see it as a financial institution taking on a bunch of risk and a regulator attempting to mitigate that risk, then when that risk materializes the public has to step in anyway?

It’s the archetypical story of financial history for thousands of years. You can tell that’s the case because we even have FDIC and it is able to shut down a bank on Friday and open it back up on Monday. Literally the oldest story in the book!

The fact that you've never heard of Roku doesn't really say much other than you either living in a country where Roku is not available, or living under a rock.

Roku tends to get a lot of retail space, so if you've walked through any walmart electronic section, or bestbuy, or whatever you're guaranteed to see them.

Before smart TVs took off there was only Apple TV and Roku. No Chromecasts or Fire Sticks. Meaning if you couldn't pay the Apple tax, you went with Roku to get your Netflix.

> Roku (who I have never heard of as a consumer)

You have commented in threads that reference Roku many times over (e.g. https://news.ycombinator.com/item?id=29338658) so you will forgive me for not believing you.

I must have missed it due to 'Chainsaw-Wielding, Wooden Samurai Stop Motion Film' distraction ?

SVB was an incompetently run bank whose major business model relied on outright cronyism. they deserve everything they get.

> Roku (who I have never heard of as a consumer) had two Billion USD in cash ? wtf

This is arrogant. There are many billion-dollar businesses you haven't heard of, most of them in boring industries. For instance, have you heard of Vitol? Likely not...but they made $279bn in revenue in 2021.

https://www.vitol.com/vitol-2021-volumes-and-review/

There's always been money in streaming when you're doing it with pipelines, ships, and barges.

Sure it takes decades but this was a startup financed by a small family loan, rather than true venture capital that could more realistically be considered "Other People's Money".

So they get to be private, start their exponential growth from a much more retarded point, and have to leverage other people's pipelines, ships, and barges or it wouldn't work.

Even in a capitalist market, enough strength can sometimes be built without other people's money, that it can be an unfair advantage compared to the capital-bound operators making up the majority of the market itself.

Entrepreneurialism != Capitalism.

With Roku I heard of it here and it turns out I had a pretty good idea about their streaming. But no further interest other than to see how they do financially over the years, as a spectator.

I'm hardly a consumer at all.

So definitely didn't find out about Roku as a consumer.

But before I knew it my brother got one, he consumes that stuff and now I'm more familiar than I wanted to be.

I would actually call it kind of boring myself.

> with no dog in this fight, I see this as some enforcement grudge match from NY capital old-school on California capital new-school, triggered by zero tolerance for crypto

I dont know why they are downvoting you. Part of what has been happening for a while is precisely that - East coast 'old money' capital waging one on everyone else and also trying to take out the West coast 'new money' capital as a competitor in the process...

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