Bank runs are not new, and the risk of an online bank run has existed since the advent of modern banking. What is relatively new, however, is how quickly fear can spread through social media. I read that the stress test could have tested this specific environment (long-term security vs raising interest rates) that led to this. It uses hypothetical scenarios to test if the bank has enough capital to handle financial challenges. The stress test doesn't test if a bank can handle a bank run since once a serious bank run starts, it doesn't matter anymore - any bank would almost certainly fail.
Bank runs are not new, and the risk of an online bank run has existed since the advent of modern banking. What is new, however, is how quickly fear can spread through social media. I read that the stress test could have tested this specific environment (long-term security vs raising interest rates) that led to this. It uses hypothetical scenarios to test if the bank has enough capital to handle financial challenges. The stress test doesn't test if a bank can handle a bank run since once a serious bank run starts, it doesn't matter anymore - any bank would almost certainly fail.
No, bank runs are not new but (good) banks put parameters in place to prevent the worst case scenario. For an historical example, banks would put teller stations as far away from the entrance to keep the que inside the bank as long as possible so the town would not see a long line outside the bank. While social media plays a role, the bigger issue over time will be shoring up liquidity faster than money can be withdrawn out of the bank. The Federal Reserve is the only bank who can truly do this. I predict in time, banks with large depositors will be required to to carry CBDC's and these CBDC's (which is nothing more than a treasury) can be held by individuals or corporations ... and then eventually distributed directly to the population.
I feel much better now Gov. Kathy Hochul tries to calm New Yorkers after Signature Bank collapse https://nypost.com/2023/03/13/gov-k...banks-remain-safe-despite-signature-collapse/
note to OT, by bad policy, wsj is referring the the rollback of Dodd Frank, for non-tier one banks such as SVB, which Trump did in 2018
Isn't it so sad that these right wingers like @basso don't even read the **** they post here. They literally see whatever Boomer anti biden stuff they find and run to post it here. It would be funny if it wasn't utterly sad
Joe Biden has put out a budget that would have several spending cuts. https://www.whitehouse.gov/omb/brie...fraud-and-makes-programs-more-cost-effective/
Biden's statment this morning mirrored this. That all depositers would get their money but that blame falls primarily on bank management.
You do know he's never going open that link right? None of them ever read counter arguments. It doesn't matter. They have an agenda. The depositors are literally being paid by a fund that's being paid into by fees by banks. The fund has 100 billion in it. Yes the fund is "backstopped" by the Treasury but the FDIC would raise fees before anything per statutory regulations. There's no universe JPM goes bankrupt I seriously have no idea why people are upset. Sigh. They loan the money but they keep the note as an asset which is still worth the full dollar at expiration. The fed doesn't have to liquidate their assets like banks do. Political leaders who are disingenuous and spew garbage to a low iq base are pathetic
as these tier-one banks are subject to capital stress test on a regular basis remain healthy, so much so that regulators allow them to increase dividend payouts. i may be going out on a limb, i predict that one or more of these heathly banks will probably buy out the assets of SVG
I blame crooked democratic senators who voted for deregulation in 2018 also? When did I say dems weren't crooked and bought out also? Dark money has corrupted both sides I've never said it's only Republicans.
