Damn I also read yours as SBF at first
Comment on Forbes' kiss of death
AlmightySnoo@lemmy.world 7 months agoIn the case of SVB it wasn’t fraud though, it was more poor risk management; they didn’t hedge against an increase in interest rates and that, together with the bank run when people learned about it, killed them.
mcmoor@bookwormstory.social 7 months ago
Chocrates@lemmy.world 7 months ago
Do banks have the authority to freeze withdrawals?
I don’t get why SVP didn’t just block all withdrawals as the panic set it.AlmightySnoo@lemmy.world 7 months ago
In theory yes:
A bank can temporarily suspend withdrawals to stop a run; this is called suspension of convertibility.
(en.wikipedia.org/wiki/Bank_run)
But IMO freezing withdrawals would just add even more panic when the last thing you want as a bank is have more clients be anxious about their money.
supercriticalcheese@lemmy.world 7 months ago
Calling using client funds as collateral for risky investments (over and over again) as poor risk management it is a bit of an understatement.
AlmightySnoo@lemmy.world 7 months ago
It wasn’t technically illegal nor was it fraud since it had an exemption from the Volcker Rule you’re referring to.
JohnDClay@sh.itjust.works 7 months ago
It’s illegal to misrepresent what you are using your clients funds for, as was proved in court.
AlmightySnoo@lemmy.world 7 months ago
it doesn’t help that they were both featured on Forbes 😅
psycho_driver@lemmy.world 7 months ago
All they needed to do was put “Hookers and blow on yachts” in really, really small print somewhere.