The Silicon Valley Bank Rescue Isn’t What Glass and
Steagall Had in Mind
https://www.nytimes.com/2023/03/15/opinion/silicon-valley-bank-rescue-glass-steagall-act.html
Roger Lowenstein:
In the rescue of S.V.B. on Friday and of Signature Bank in New York two days later, the F.D.I.C. overtly ignored the cap and rescued all depositors, irrespective of size. This is a breathtaking leap.
Rescued seven-figure depositors were primarily venture companies steeped in the ideology of investing. The first plank of capitalism is that it entails risk. You cannot sensibly invest without assessing the chance for loss. If venture firms relied on groupthink rather than financial due diligence, that was their doing. In the case of Signature, which was exposed to the crypto industry, the rescue probably bailed out gamblers on speculative assets.
How Washington Decided to Rescue Silicon Valley Bank’s Depositors
https://www.nytimes.com/2023/03/14/us/politics/inside-silicon-valley-bank-rescue.html
Officials were initially unsure about the need for the measures they eventually announced to shore up the financial system, but changed their minds quickly.
https://www.nytimes.com/2023/03/15/opinion/silicon-valley-bank-rescue-glass-steagall-act.html
Roger Lowenstein:
In the rescue of S.V.B. on Friday and of Signature Bank in New York two days later, the F.D.I.C. overtly ignored the cap and rescued all depositors, irrespective of size. This is a breathtaking leap.
Rescued seven-figure depositors were primarily venture companies steeped in the ideology of investing. The first plank of capitalism is that it entails risk. You cannot sensibly invest without assessing the chance for loss. If venture firms relied on groupthink rather than financial due diligence, that was their doing. In the case of Signature, which was exposed to the crypto industry, the rescue probably bailed out gamblers on speculative assets.
How Washington Decided to Rescue Silicon Valley Bank’s Depositors
https://www.nytimes.com/2023/03/14/us/politics/inside-silicon-valley-bank-rescue.html
Officials were initially unsure about the need for the measures they eventually announced to shore up the financial system, but changed their minds quickly.
Telegraph’s Jeremy Warner notes:
https://www.telegraph.co.uk/business/2023/03/15/return-bailouts-shows-capitalism-effectively-dead/
It's always the same old story. Whatever the safeguards, however big the required capital and liquidity buffers, when push comes to shove there is only one choice that beleaguered governments can make when faced by a full-on financial crisis.
You can either underwrite the system, the finance minister will be told by his advisers as the maelstrom builds, or you can face chaos in the markets the following morning and certain defeat come the next election for the economic devastation so caused.
For the bankers at the centre of it all, it's a two-way bet. The profits and gains of finance are privatised, but the losses are socialised – heads I win, tails you lose.
https://www.telegraph.co.uk/business/2023/03/15/return-bailouts-shows-capitalism-effectively-dead/
It's always the same old story. Whatever the safeguards, however big the required capital and liquidity buffers, when push comes to shove there is only one choice that beleaguered governments can make when faced by a full-on financial crisis.
You can either underwrite the system, the finance minister will be told by his advisers as the maelstrom builds, or you can face chaos in the markets the following morning and certain defeat come the next election for the economic devastation so caused.
For the bankers at the centre of it all, it's a two-way bet. The profits and gains of finance are privatised, but the losses are socialised – heads I win, tails you lose.