The VCs started the bank run. They were the primary depositor base of SVB. It wasn't a question of whether it was rational or ethical to join a bank run already in progress. Instead it was they, the rational, enlightened VCs, who started the bank run in the first place, becoming prisoners of a dilemma of their own making.
It was in their best interest to cooperate to not run on their bank, and they failed to do so, which in turn brought down SVB, risks bringing down other regional banks in a domino-like fashion, and has already resulted in government bailouts that have made people outside of the SV bubble hate them even more than they already did.
Furthermore, the supposedly "evil" big banks, as I've repeatedly noted, have shown a comparatively greater ability to cooperate for the greater good of their industry and the wider economy, which is embarrassing given how these VCs posture.
I think it's really ridiculous for anyone to assert with a straight face that bank customers have a moral responsibility to keep money in a bank that's failing and under water. It's even more ridiculous for a bunch of tech VCs to be responsible for a country's financial health and stability of the banking system.
I don't think banks are "evil" and I don't think anyone has commented to that effect here. They're just responsible for this mess.
Australia doesn't have many people that are "unbanked". AUSTRAC already requires notification of any transfer over AUD10K.
India has managed to get a large proportion of their population into the "banked" column by introducing a cheap/easy mechanism for people to store and forward their money. Whether that is also related to the "fallacy that cash is for criminals" is orthogonal to the desirable situation that even the poorest can have a bank account.
Bank accounts allow people to store their funds safely (or at least as safe as the banking regulators), it allows them to receive and send their money much more easily, which allows them greater involvement in the economy.
Australia has a few, large ("too big to fail") banks and government benefits are paid direct to bank accounts. Banks are required to offer basic/fee-free accounts and only require KYC ("100 point") ID checks to open. No one uses cheques/checks.
Basically, the US banking system is 3rd world and so distributed in terms of both the size of banks (state banks are too small, federal are too big) and regulation (50 state regulators as well as all the feds).
FedNow will hopefully start to fix this by replacing the clunky ACH and move the US to a modern EU/CA/AU/NZ/UK type banking system.
It'd help if the US used the USPS to deliver a basic banking service that is zero-fee. It would also help if the US had both an EFT debit card system that wasn't tied to the Visa/MC duopoly and merchants were forced to go to Chip+PIN, not the ridiculous Chip+Signature that is as far as they've got so far.
It would be to the distinct advantage of the majority of the US's "unbanked" population if they could have a cheap/zero-cost banking solution.
All of that is orthogonal to your worries about "fallacies" about cash and the fear of civil forfeiture. In fact, on that last item, it would be much harder for the average local police force to forfeit someone's bank account than it is for them to seize physical cash, requiring a warrant as well as working through a bank's own legal and other departments.
Aussie banks have both fixed and variable rate mortgages.
Most mortgages are either:
* Fixed: 1-5 year terms with exit fees if changed earlier
* Variable: 25 year terms, with variable rates, "offset accounts" (an associated account where you can deposit that offsets the outstanding principal of the mortgage), reduced or zero entry/exit fees, ability to "redraw" (effectively treating the mortgage as a line of credit) etc.
Australia has the equivalent of FDIC insurance (called FCS) that covers up to AUD250K per account holder at all ADIs.
The 4 "major" banks in Australia (Commonwealth, Westpac, NAB, ANZ) all maintain ratios above the minimum requirements and above the international requirements for "unquestionably strong". They're also (implied) "too big to fail".
APRA (our banking regulator) publishes plenty of stats.
I found this presentation https://www.commbank.com.au/content/dam/commbank-assets/inve... for the Commonwealth for FY21, which shows that their loan book is funded 73% by deposits, and the remainder is 74% long term, with a 5 year average maturity and they have 13.1% of their capital retained.
So if they have they have 13% capital, as well as AUD175B in liquid assets, with $610B in deposits, then they'd start to be in real trouble if more than 25% of their account holders started pulling out cash.
Of that $610B, $310B is households, so the split between standard savings accounts and business/investment/term deposits etc is roughly 50/50.
Banks do differentiate. If you have an account that is <$250K, you're covered by the FDIC, which essentially makes it zero risk, irrespective of the account's associated interest payments.
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[ 3.2 ms ] story [ 36.9 ms ] threadIt was in their best interest to cooperate to not run on their bank, and they failed to do so, which in turn brought down SVB, risks bringing down other regional banks in a domino-like fashion, and has already resulted in government bailouts that have made people outside of the SV bubble hate them even more than they already did.
Furthermore, the supposedly "evil" big banks, as I've repeatedly noted, have shown a comparatively greater ability to cooperate for the greater good of their industry and the wider economy, which is embarrassing given how these VCs posture.
I don't think banks are "evil" and I don't think anyone has commented to that effect here. They're just responsible for this mess.
India has managed to get a large proportion of their population into the "banked" column by introducing a cheap/easy mechanism for people to store and forward their money. Whether that is also related to the "fallacy that cash is for criminals" is orthogonal to the desirable situation that even the poorest can have a bank account.
Bank accounts allow people to store their funds safely (or at least as safe as the banking regulators), it allows them to receive and send their money much more easily, which allows them greater involvement in the economy.
Australia has a few, large ("too big to fail") banks and government benefits are paid direct to bank accounts. Banks are required to offer basic/fee-free accounts and only require KYC ("100 point") ID checks to open. No one uses cheques/checks.
We have account-to-account transfers with 2 day settlement, but that is replaced by a new system that is instant gross settlement through our Reserve Bank (equivalent of US Fed). See https://www.rba.gov.au/payments-and-infrastructure/new-payme...
Basically, the US banking system is 3rd world and so distributed in terms of both the size of banks (state banks are too small, federal are too big) and regulation (50 state regulators as well as all the feds).
FedNow will hopefully start to fix this by replacing the clunky ACH and move the US to a modern EU/CA/AU/NZ/UK type banking system.
It'd help if the US used the USPS to deliver a basic banking service that is zero-fee. It would also help if the US had both an EFT debit card system that wasn't tied to the Visa/MC duopoly and merchants were forced to go to Chip+PIN, not the ridiculous Chip+Signature that is as far as they've got so far.
It would be to the distinct advantage of the majority of the US's "unbanked" population if they could have a cheap/zero-cost banking solution.
All of that is orthogonal to your worries about "fallacies" about cash and the fear of civil forfeiture. In fact, on that last item, it would be much harder for the average local police force to forfeit someone's bank account than it is for them to seize physical cash, requiring a warrant as well as working through a bank's own legal and other departments.
Most mortgages are either:
* Fixed: 1-5 year terms with exit fees if changed earlier
* Variable: 25 year terms, with variable rates, "offset accounts" (an associated account where you can deposit that offsets the outstanding principal of the mortgage), reduced or zero entry/exit fees, ability to "redraw" (effectively treating the mortgage as a line of credit) etc.
The 4 "major" banks in Australia (Commonwealth, Westpac, NAB, ANZ) all maintain ratios above the minimum requirements and above the international requirements for "unquestionably strong". They're also (implied) "too big to fail".
APRA (our banking regulator) publishes plenty of stats.
I found this presentation https://www.commbank.com.au/content/dam/commbank-assets/inve... for the Commonwealth for FY21, which shows that their loan book is funded 73% by deposits, and the remainder is 74% long term, with a 5 year average maturity and they have 13.1% of their capital retained.
So if they have they have 13% capital, as well as AUD175B in liquid assets, with $610B in deposits, then they'd start to be in real trouble if more than 25% of their account holders started pulling out cash.
Of that $610B, $310B is households, so the split between standard savings accounts and business/investment/term deposits etc is roughly 50/50.
Aussie banks offer it.
The comment you were replying to said "quickly and at fair value".