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Comment by mortenjorck | Hacker News Reader

I think there was an air of "hey, it's been ten years since 2008, the system is working; we can relax Dodd-Frank a little bit."

After March 2023, the message should be an unequivocal "no, not even a little bit."

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How did the relaxation of Dodd-Frank lead to what happened at SVB?

From what I understand there use to be a stress test. I.E. government employees would hypothetically withdraw a lot of deposits and see what would happen. The threshold for the test was recently changed from 50 billion to 250 billion AUM, so SVB no longer met the threshold and didn't have to do the stress test. I have heard the stress test would have caught this.

Dodd Frank != stress testing and nobody was ever stress testing regional banks. Maybe they should start now given that depending on the region bank failure can have national security consequences

From my experience at a regional/super-regional bank, CECL and CCAR were absolutely happening in banks around the 200b mark.

It should not have taken a stress test for the FRBSF or CA State Examiners to see the high risk to solvency a run would create for SVB given the size and state of their HTM portfolio.

Possibly, but Dodd-Frank wouldn't have prevented what happened at SVB.

Wouldn’t SVB have to go through the rigors of the stress tests mandated by Dodd-Frank?

What makes you think the regulators wouldn't have given SVB a passing grade?

You mean besides the fact that FDIC just took them over?

No more polio! We can stop getting polio vaccines!

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