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Is that repeatation of 2008's recession?(your opinion)

If you are still taking questions... How are the SC bank crises in Europe connected to the SVB run?

Is there a large difference vis a vis inflation between the fed releasing money that had been saved and was not to be touched, versus printing money and giving it to them?

What should SVB have done with interest rates started to go up? They had a lot of long term bonds then with lower interest rates, and they apparently had that surge of deposits, partly leading to them loading up with long term bonds. If they immediately sold some of the old ones, they'd have had some of the losses that sank them. They didn't know how far it was going to go on interest rates (each one adding to their potential threat). The strategy that would have worked better in retrospect would be buy more shorter term bonds, fewer longer term bonds - but then they'd have lower returns (as longer term bonds pay better). Was this an obvious problem they should have dealt with earlier, or was it impossible to foresee?

u/jh937hfiu3hrhv9: What are SVB's assets? Does the depositer's refund come from bank reserves or the FDIC?

SVB's assets are largely longer-term Treasuries and government-backed mortgage securities. These securities have little risk of loss if they're held to maturity, but they lost paper value as interest rates increased - so when SVB lost deposits and had to sell assets, they had to bear those losses.
While depositors have immediate access to their funds—which may needed to be funded in the short-term by the FDIC—the FDIC will only lose money if its sale of the assets (and/or liabilities) of SVB is less than enough to cover all the depositors. And, if the FDIC's insurance fund dips below what it determines to be sufficient coverage for the system - it will levy the banking system for the shortcoming. — Steven

u/SockPuppetsUnite45: Does this mark the beginning of the end for bank deregulation legislation that is framed as 'right sized or tailored regulation'?

Unlikely. Tailoring as a broad and general concept is something that seems pretty logical: a community bank with less than $1 billion in assets and does mostly just basic lending shouldn't face the same type of regulations as a megabank with $3 trillion in assets. How exactly that all shakes out is very complicated (and, as you implicitly suggest, offers a lot of room for mischief). But certainly, this has likely made both lawmakers and regulators much less sympathetic to arguments from banks, say, between $100 billion and $250 billion in size, that they don't pose risks to the economy. — Victoria

u/boazg: Are we expecting a chain reaction of more banks collapsing due to the global nature of panic these days?

The Fed has intervened to insulate open banks against liquidity concerns related to the open banks. Preventing a contagion likely played a role in invoking these systemic risk authorities for banks that are otherwise not central to the financial system. Crisis-fighters largely lost their authorities after the 2008 financial crisis to protect individual banks from contagion without first closing them. So, responding so forcefully to these relatively insignificant banks' failures so forcefully hopefully limits contagion to any banks that may actually be more prone to spreading financial wildfire.
the other thing worth noting is that this has primarily been a run on one kind of business model: banking tech/VC/Silicon Valley - which itself is facing belt-tightening as the Fed has raised interest rates steeply. We have not seen signs of contagion large, diversified banks - which are actually experiencing deposit inflows. — Steven

u/Longjumping-Ease-353: How can financial journalism be improved to prevent future black swan events? Like Enron, theranos, maddoff, SBF, we work, Lehman bros and SVB?

Sam here: Great question. Victoria and I were talking about it offline. On the one hand the Theranos story was a product of tremendous journalism.With that said, a lot of it has to do with building up knowledge around finance, markets, regulation, policy etc. That takes time and commitment to the profession. The other thing to remember is that the media landscape's wider and thinner than it was when there were multiple daily papers competing for the same market. Markets are much larger, but journalism's shrunk. Time and investment is the only way that improves.

Hey all, there was a duplicate post of this AMA, which may be taken down, so we're sharing some of those thoughtful Qs and responses here:

What do you think of what's happening right now with Credit Suisse?

What are the startups besides apps to extract and sell personal information to advertisers?

Nah, they've got a lot of good assets. But the real reason another bank would want to buy them is relationships with all those customers (a big chunk of whom are tech startups). - Victoria

they have different views about the effectiveness of govt intervention, but again the schools really only speak to macroeconomic interventions

Sam here: Great question. Victoria and I were talking about it offline. On the one hand the Theranos story was a product of tremendous journalism.

With that said, a lot of it has to do with building up knowledge around finance, markets, regulation, policy etc. That takes time and commitment to the profession. The other thing to remember is that the media landscape's wider and thinner than it was when there were multiple daily papers competing for the same market. Markets are much larger, but journalism's shrunk. Time and investment is the only way that improves.

So their assets are crap and nobody will buy them but the FDIC and taxpayers are bailing out banks again. Cool.

Would they have something to say about the approaches of government intervention?

Sam here: They've also got a loan book that a lot of private equity firms are reportedly circling.

How can financial journalism be improved to prevent future black swan events? Like Enron, theranos, maddoff, SBF, we work, Lehman bros and SVB ?

SVB's assets are largely longer-term Treasuries and government-backed mortgage securities. These securities have little risk of loss if they're held to maturity, but they lost paper value as interest rates increased - so when SVB lost deposits and had to sell assets, they had to bear those losses.

While depositors have immediate access to their funds—which may needed to be funded in the short-term by the FDIC—the FDIC will only lose money if its sale of the assets (and/or liabilities) of SVB is less than enough to cover all the depositors. And, if the FDIC's insurance fund dips below what it determines to be sufficient coverage for the system - it will levy the banking system for the shortcoming.

- Steven

What are SVB's assets?

Does the depositer's refund come from bank reserves or the FDIC?

The Fed has intervened to insulate open banks against liquidity concerns related to the open banks. Preventing a contagion likely played a role in invoking these systemic risk authorities for banks that are otherwise not central to the financial system. Crisis-fighters largely lost their authorities after the 2008 financial crisis to protect individual banks from contagion without first closing them. So, responding so forcefully to these relatively insignificant banks' failures so forcefully hopefully limits contagion to any banks that may actually be more prone to spreading financial wildfire.

the other thing worth noting is that this has primarily been a run on one kind of business model: banking tech/VC/Silicon Valley - which itself is facing belt-tightening as the Fed has raised interest rates steeply. We have not seen signs of contagion large, diversified banks - which are actually experiencing deposit inflows.

-Steven