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Comment by toomuchtodo | Hacker News Reader

SVB lobbied to not be regulated as strongly as other banks, and won. You would be perfectly fine at most other banks. This was a choice.

https://www.theguardian.com/business/2023/mar/11/silicon-val...

Edit: https://www.levernews.com/svb-chief-pressed-lawmakers-to-wea...

> Eight years before the second-largest bank failure in American history occurred this week, the bank’s president personally pressed Congress to reduce scrutiny of his financial institution, citing the “low risk profile of our activities and business model”, according to federal records reviewed by the Lever.

> Three years later – after the bank spent more than half a million dollars on federal lobbying – lawmakers obliged.

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So SVB owners should take losses.

Not those who had bank accounts there and literally did nothing wrong to cause this or even contribute to it.

It was just yesterday that there were pages of comments here on HN filled with people talking about how there should be no bank reserves. The arguments were that cash flow is king and reserves are bad for the economy.

Pretty much anyone on the internet can make an account here.

Surely you don’t expect everyone to agree with what everyone else has said just because it’s on the same site!

In the same way, surely you don't expect taxpayers to agree with what SVB's account holders want, just because they are on this site!

FWIW, I am a taxpayer and am not a SVB bank account holder.

I don’t want to see this spin out of control on Monday when all those companies can’t make payroll and even more carnage ensues. This could blow up into a much much bigger panic contagion.

Thank you I do understand that.

Maybe, just maybe, instead of us collectively trying to manage the latest collapse, perhaps we could impose actual requirements (not regulations) on banks. There have been 562 bank collapses since 2001. I doubt that many people who work outside of finance would think the balance sheets of those banks look like anything like what people would expect in a stable "bank".

It's insane that very few banks in the country can reasonably withstand bank runs. The reason? They have no money on hand, because they are gambling. Sure, the ecosystem would change, but that's not a bad thing.

1. It won't spin out of control. 2. Stock in SVB (market capitalization) is $6B. Deposits are almost $200B. Depositors who had put more than 250k did so willingly knowing the risks.

It's truly remarkable that most likely SVB lobbied congress to allow more risk taking because it will encourages innovation, while in reality what it did destroys innovation.

We are asking for new regulation that would prevent this from occurring.

Losing your business is a powerful way to learn a lesson.

Don't ask taxpayers to fix your mistakes for you.

That rule already exists. It's Basel III, and SVB was one of those who lobbied to have it removed for particular US banks in 2018. As you well know.

Here's the explainer for everyone else: https://archive.is/gmJxU

That article was originally posted here:

https://www.levernews.com/svb-chief-pressed-lawmakers-to-wea...

Might help if you are paywall-blocked.

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