They are officially announcing to all listening banks that customers deposits are theirs to gamble with as they please. Why do banks get to play with those deposits, as if they were just free leverage from unwilling captive participants?
How can small banks compete against big banks that can allow themselves to act this way?
They can't. If you're big you get to risk it all. If you're small nobody will come to you as they know they won't be insured by a spooked Fed stopping "contagion".
There's no legitimate reason to keep banks priviledge as a government supported oligopoly of investment institutions allowed to play with other people's money. If you admit the government is actually backstopping those deposits, there is absolutely zero reasons why banks get to gamble it in the first place. They are getting to eat the cake and have it too. This has to stop.
If I gambled away all your money you'd never give me more again. If the bank gambled away all your money and the government came and made you whole, you'd look to become a banker too so you get to gamble away money that isn't yours.
> If I gambled away all your money you'd never give me more again
Apart from the arguing about the definition of gambling here applied to the SVB situation, no one is going to be able to give SVB another dime after this. They no longer exist. This is the exact opposite of risk free.
machina_ex_deus|3 years ago
How can small banks compete against big banks that can allow themselves to act this way? They can't. If you're big you get to risk it all. If you're small nobody will come to you as they know they won't be insured by a spooked Fed stopping "contagion".
There's no legitimate reason to keep banks priviledge as a government supported oligopoly of investment institutions allowed to play with other people's money. If you admit the government is actually backstopping those deposits, there is absolutely zero reasons why banks get to gamble it in the first place. They are getting to eat the cake and have it too. This has to stop.
If I gambled away all your money you'd never give me more again. If the bank gambled away all your money and the government came and made you whole, you'd look to become a banker too so you get to gamble away money that isn't yours.
fach|3 years ago
Apart from the arguing about the definition of gambling here applied to the SVB situation, no one is going to be able to give SVB another dime after this. They no longer exist. This is the exact opposite of risk free.