Max KennerlyMar 12, 2023

Venture capitalists and NYTimes working overtime to rewrite history on Silicon Valley Bank.

I'd believe it's a "systemically important financial institution," except that #SVB and VCs were adamant that it was not one, and lobbied hard to make sure it wasn't treated as one.

Sorry, no, we're not going to consider it one for bailout purposes only, especially not without any reforms to prevent the next one.

https://www.nytimes.com/2023/03/10/technology/silicon-valley-bank-fallout.html?partner=IFTTT

https://theintercept.com/2023/03/11/silicon-valley-bank-used-former-mccarthy-staffers-to-weaken-regulations-lobby-fdic/

Silicon Valley Bank’s Collapse Causes Strain for Young Companies

Young companies raced to get their money out of the bank, which was central to the start-up industry. Some said they could not make payroll.

The New York Times
Show threadAugusteMar 12, 2023
@maxkennerly I get it, but bail outs are good and not costly when properly managed. You cannot regulate away all risk. Every so often you should bailout.
Show threadMax KennerlyMar 12, 2023
@auguste Depends on the bailout. Here, VCs are asking to keep all the money they made from using the bank's services, while forcing the rest of us to cover for a foreseeable loss they incurred. Aren't they supposed to be good at capital allocation? They can't even manage a standard financial risk that the government warns them about.
Show threadPusher Of Pixels (old account)

@maxkennerly @auguste

I thought I read that the costs paid are out of the FDIC funds collected from the banks? Obviously won't work for a system wide failure but for 1-2 it probably can.

Mar 13, 2023 at 5:45pmWeb