/biz/ - Business & Finance

>>54099381
Banks that aren't designated as systematically important are exempt from fed stress testing and loan makeup disclosures and a bunch of other shit.
The issue is that the fed stress testing is a make-belive feelgood horseshit to begin with. You can't guard against idiosyncratic shocks by definition because they are idiosyncratic, yet (((banksters))) in the US refused to sign on to the full Basel rules, because the extra capital buffers would cut into their margins.

The clown factor is that banks bought legislation to be partially exempt from Dodd-Frank, because - according to them - they aren't systematically important, yet not only was the fed and treasury forced to backstop SVB like it was a systematically important bank, but they were forced to backstop ALL bank deposits, because in the current tightening macro backdrop and retarded cattle mentality bank runs are actually a real possibility.

The fundamental issue is how to unfuck the banking system itself? Because of QE big banks have too much reserves thus have no financial incentive to raise interest on deposits held at them, but if a risk does exist for those deposits why should anyone put deposits into banks without adequate compensation? If the cattle figure this out it's bank runs and failures, if they don't figure it out the market is mispricing risk which creates malinvestment and exuberance which leads to catastrophe, but the only tools that can deal with that result in even more moral hazard being introduced into the banking system with even more distortion to risk pricing.

The reasons SVB failed is they refused to hedge their interest rate risk and took on unjustifiable duration risk, because they wanted short term profits.
Incentives are completely out of whack with the outcomes the system is designed to produce: Private banks either maximize short term profits or they provide multiple essential financial functions to the entire economy above all else. These are contradictory.

>>53840816
>burned by "it's the new normal" kekdemic stocks
>burned by meme stocks
>burned by tech stocks
>burned by crypto
>that's it! I'm putting my hard earned cash into fucking 6months treasury bills
>Owl-headed Yellen hootin' and hollerin' about how they can push out the drop-dead date from the original June estimate to around August
>it causes the US government to defaults on literally the exact same bond tranche that you bought
mfw