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In 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.

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supercriticalcheese@lemmy.world ⁨1⁩ ⁨year⁩ 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.

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- AlmightySnoo@lemmy.world ⁨1⁩ ⁨year⁩ ago
  It wasn’t technically illegal nor was it fraud since it had an exemption from the Volcker Rule you’re referring to.
  
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  - JohnDClay@sh.itjust.works ⁨1⁩ ⁨year⁩ ago
    It’s illegal to misrepresent what you are using your clients funds for, as was proved in court.
    
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    AlmightySnoo@lemmy.world ⁨1⁩ ⁨year⁩ ago
    
    wait, I think that was SBF rather than SVB. Why are these acronyms so similar :(
    
    it doesn’t help that they were both featured on Forbes 😅
    
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    psycho_driver@lemmy.world ⁨1⁩ ⁨year⁩ ago
    All they needed to do was put “Hookers and blow on yachts” in really, really small print somewhere.
    
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mcmoor@bookwormstory.social ⁨1⁩ ⁨year⁩ ago
Damn I also read yours as SBF at first

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Chocrates@lemmy.world ⁨1⁩ ⁨year⁩ 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.

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- AlmightySnoo@lemmy.world ⁨1⁩ ⁨year⁩ 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.
  
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