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Comment by skwirl | Hacker News Reader

If SVB collapsed because of corruption in the federal government, then that just makes a stronger case for federal institutions doing whatever they need to do to make the depositors whole. The solution to failing to protect depositors is not to snuff them out, it's to make things right.

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Where on earth do you get "corruption in the federal government" from that article? It's explicitly saying that they were lobbying to weaken regulation. That's transparently circular. You're saying government oversight is bad because the government can be convinced not to oversee, in which case we get bad results from the lack of oversight!

In this particular case, it's unclear exactly what oversight could have prevented the mistakes. We just won't know for a while. But... yeah, it seems very much not unreasonable that the 2018 Dodd-Frank rollback may be part of the problem.

I don't see where you get "government oversight is bad" from anything I said. I strongly believe that we should have strict government oversight of deposit accounts and that people should be able to have faith in the banking system. I don't think it's depositors fault that banks lobby to weaken this regulation and that the government goes along with it.

I agree that we don't know if the weakened regulations caused this - it's possible the regulators already had the tools in their belt they needed to prevent this and were asleep at the wheel. We will find out eventually.

OK, I see what you meant now. FWIW: employing the phrase "corruption in the federal government" to refer to what was clearly lawfully drafted and correctly passed legislation marks you as kind of a wingnut, so I interpreted your point to be "see? we can't trust the government!" and not "the government did something bad".

The fact that the 2018 bill was a bad bill with bad effects doesn't make it "corrupt". Congress debated it, congress passed it, the president signed it. All that happens in public; it's the opposite of "corrupt".

I think you would do well to not try to instantly bucket people into "my political tribe" or "the enemy political tribe." Not only is it lazy and harmful, you just aren't good at it. Plenty of people on the left would describe the relationship between members of congress and banking institutions to be corrupt.

To add; "corrupt" and "legal" are frequently the same thing. Corruption is often about misbehaving within the confines of laws you wrote specifically to take advantage of.

I've started to wonder if we have any other kind, frankly.

I think the govt may have been able to help with this issue.

But it would have taken the govt getting into the whole risk & diversification & bond laddering & liquidity issues at a very granular level. You know, the whole shindig about huge risks to the banking sector and responses? That, all over again.

I'll say from my perspective they were under-regulated. We can't have dumb banks throwing all their deposits into Fixed-Income with similar maturities putting their deposits at extreme risk of devaluation and interest rate risk with no hedging or laddering, and no good response to liquidity demands.

I question the professionalism of the bank's investment crew given we knew about the interest rate rise several years ago. NIRP/ZIRP could never continue indefinitely and they knew it, and we knew it.

We knew it!

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