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Comment by josh2600 | Hacker News Reader

Let's just be clear, Signature didn't 'collapse', the FED killed Signature to send a message to other banks.

Barney Frank straight up says as much: https://twitter.com/nic__carter/status/1635328056234766337?s....

Edit: FWIW, I have no insider knowledge of what was happening at Signature, but there's no one I've talked to in Crypto who was aware of risk at that bank. This is quite in contrast to Silvergate where it was well known that the bank was not healthy.

I was not a signature customer, but at Silvergate, even things as simple as changing an authorized user on an account took months or years to complete. I'm still an authorized user on an account at Silvergate that I haven't worked at in ~4 years (despite many, many customer service requests to be removed including repeatedly signed documents).

So much of why Silvergate failed was simply business execution.

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> Let's just be clear, Signature didn't 'collapse', the FED killed Signature to send a message to other banks. Barney Frank straight up says as much

I think you mean the FDIC killed them - and if you can't trust the word of a Boardmember of a bank whose equity just got zeroed out, who can you trust?

> and if you can't trust the word of a Boardmember of a bank whose equity just got zeroed out

, former congressman, and leading co-sponsor of the 2010 Dodd–Frank Act.

I consider Mr. Frank to have been regulatory captured once he started receiving potentially multi-million paychecks from banks.

Right - it should be a negative symbol that a former regulator with no applicable banking experience is on your board, not a positive one. 20% of the banks deposit base was withdrawn o Friday. I'm guessing the FDIC had a much better view into the bank's health than a bunch of random commenters.

I make no judgement about a former congressman sitting on a board raking in the checks -- it's a valid retirement strategy.

But it is possible he was right. But it's also possible he's wrong, and making these claims similar to those made by Sam Bankman-Fried (woulda/shoulda/coulda) to preempt a deeper investigation.

But yeah, I trust the FDIC more than I trust any member of a board on any bank.

So why would you not say the same for the folks spearheading their closure? Yellen has gotten multi million checks from banks

SVB was actually shut down by state banking regulators, not the FDIC or Fed itself (Yellen is the Fed). The state of California then listed the FDIC as the receiver of the bank's assets.

So I believe this was purely the work of the banking regulators and not the Fed. FDIC called the Fed for help to reduce the contagion, and the Fed agreed. It's possible the Fed didn't have to agree...

https://www.fdic.gov/resources/resolutions/bank-failures/fai....

Yellen has been intimately involved in the process so I don't think there's too much of a difference right now, especially since they all had a zoom call including hundreds of senators at like 1 in the morning over the weekend.

So? Former (and even current) congressmen are people too and can have bias, especially when their own money is involved.

Sure, but I think it's relevant context.

> there's no one I've talked to in Crypto who was aware of risk at that bank

That is not worthy of a conspiracy theory, it just reinforces the poor financial understanding of anyone involved in crypto.

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