SVB collapse is a blight on US regulators

is the title of its primary state-based regulator – the California Department of Financial Protection and Innovation.

In essence, this is a high-innovation, high-credit-availability banking model. Supervision takes a back seat. The stress testing that Australian banks take for granted clearly did not exist in California.How else to explain the fact that the unrealised losses on Silicon Valley Bank’s liquid securities would have wiped out virtually all of its Tier 1 common equity?

Just because the US tolerates a system that allows regional banks to collapse does not mean it makes sense. “It’s not hard to fix, either. Banks can quickly enter swap contracts to cheaply alter their exposure to interest rate risk without selling the whole asset portfolio.”

You can only blame one person proped up by cronies

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Bank runs expected as SVB collapse upends rate forecastsBank runs and sharemarkets routs following the second-biggest bank collapse in US history has financial markets reassessing their bets on the Federal Reserve’s next interest rate moves.
Source: FinancialReview - 🏆 2. / 90 Read more »