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You are right we may endure a banking crisis anyway. There would have been a banking crisis for certain without swift and decisive action.
SVB's executive team being idiots is one matter. Protecting depositors in efforts to forestall a systemic bank run or series of runs is another. That's why big depositors were made whole.
There is no other industry in which one business failing very well might cause several or many others to fail and tank the entire economy in the process.
You are right we may endure a banking crisis anyway. There would have been a banking crisis for certain without swift and decisive action.
SVB's executive team being idiots is one matter. Protecting depositors in efforts to forestall a systemic bank run or series of runs is another. That's why big depositors were made whole.
There is no other industry in which one business failing very well might cause several or many others to fail and tank the entire economy in the process.
The crisis may not have been any or much worse had they let the bank fail. I suspect the crisis is going to spread anyway. According to news reports, this bank was mismanaged, executives sold stock prior to the bank crisis, many wealthy people had more than $250k there knowing full well their money was only protected by the FDIC up to $250k. The government rewarded poor behavior by finding a way to bail them out. It is not the responsibility of the government to bail out mismanaged businesses and they have no business doing so. This sets terrible precedent. Are they going to bail out other banks or even other businesses that fail?
The crisis may not have been any or much worse had they let the bank fail. I suspect the crisis is going to spread anyway. According to news reports, this bank was mismanaged, executives sold stock prior to the bank crisis, many wealthy people had more than $250k there knowing full well their money was only protected by the FDIC up to $250k. The government rewarded poor behavior by finding a way to bail them out. It is not the responsibility of the government to bail out mismanaged businesses and they have no business doing so. This sets terrible precedent. Are they going to bail out other banks or even other businesses that fail?
almost all business that are of decent size keep well over 250k in an account .
even a business like i do some work for has a million dollar a week pay roll …businesses need banks insured over 250k or not.
most business cannot lose the money in their business account or they will likely fail.
so this wasn’t about some bank failing and a few wealthy investors losing money …i it would have created bank runs everywhere as big business pulls money out of banks driving almost all but the biggest banks in to insolvency causing millions of business failures
almost all business that are of decent size keep well over 250k in an account .
even a business like i do some work for has a million dollar a week pay roll …businesses need banks insured over 250k or not.
most business cannot lose the money in their business account or they will likely fail
Perhaps the $250k should be raised to $500k. But businesses can and should spread deposits among several banks. In todays world, this would not be that difficult. I have read that this bank had some sort of agreement with businesses that prohibited or encouraged them to not do so (don’t know the specifics or how accurate this is).
almost all business that are of decent size keep well over 250k in an account .
even a business like i do some work for has a million dollar a week pay roll …businesses need banks insured over 250k or not.
most business cannot lose the money in their business account or they will likely fail.
so this wasn’t about some bank failing and a few wealthy investors losing money …i it would have created bank runs everywhere as big business pulls money out of banks driving almost all but the biggest banks in to insolvency causing millions of business failures
We don’t know that it would have been any worse than what it’s going to be anyway. Please read Kevin O’Learys comments in the link in post 22 above.
The crisis may not have been any or much worse had they let the bank fail. I suspect the crisis is going to spread anyway. According to news reports, this bank was mismanaged, executives sold stock prior to the bank crisis, many wealthy people had more than $250k there knowing full well their money was only protected by the FDIC up to $250k. The government rewarded poor behavior by finding a way to bail them out. It is not the responsibility of the government to bail out mismanaged businesses and they have no business doing so. This sets terrible precedent. Are they going to bail out other banks or even other businesses that fail?
It would have been much worse.
It is the responsibility of the gov. to prevent economic collapse when possible.
It is the responsibility of the gov. to prevent economic collapse when possible.
You have no way of knowing that economic collapse was imminent… There may well still be considerable fallout. I’m not in favor of bailing out mismanaged banks or wealthy individuals who should have known that FDIC protections were only up to $250k. Kevin O’Leary makes some excellent points.
The crisis may not have been any or much worse had they let the bank fail. I suspect the crisis is going to spread anyway. According to news reports, this bank was mismanaged, executives sold stock prior to the bank crisis, many wealthy people had more than $250k there knowing full well their money was only protected by the FDIC up to $250k. The government rewarded poor behavior by finding a way to bail them out. It is not the responsibility of the government to bail out mismanaged businesses and they have no business doing so. This sets terrible precedent. Are they going to bail out other banks or even other businesses that fail?
I like Kevin O'Leary.....he is majestically unqualified per the subject.
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