Josh, in the absence of the intervention, tax revenues would have been significantly lower. The holders of SVB securities lost all their money. The same would have happened at FRB. If the venture-backed depositors had lost 20% of their money, that would have created large capital losses and downstream losses for employees. My guess is th…
Josh, in the absence of the intervention, tax revenues would have been significantly lower. The holders of SVB securities lost all their money. The same would have happened at FRB. If the venture-backed depositors had lost 20% of their money, that would have created large capital losses and downstream losses for employees. My guess is that, from a Federal and State government perspective, the decision to guarantee all deposits was a no-brainer. Re moral hazard, I doubt any bank executive wants to follow in the footsteps of the SVB team, independent of regulations. Jamie Dimon didn't go out and place all his chips on CMOs after the financial crisis so he could have his illiquid shareholdings increase in value. cheers, bill
Josh, in the absence of the intervention, tax revenues would have been significantly lower. The holders of SVB securities lost all their money. The same would have happened at FRB. If the venture-backed depositors had lost 20% of their money, that would have created large capital losses and downstream losses for employees. My guess is that, from a Federal and State government perspective, the decision to guarantee all deposits was a no-brainer. Re moral hazard, I doubt any bank executive wants to follow in the footsteps of the SVB team, independent of regulations. Jamie Dimon didn't go out and place all his chips on CMOs after the financial crisis so he could have his illiquid shareholdings increase in value. cheers, bill