When I ran the calculation for SVB, the number I came up with was 75%. Essentially, if you experience a really bad 30-day period where you’ve had heightened withdrawals and heightened concerns about your bank, do you have enough assets that you could sell or raise cash off of to meet those demands? The first rule was the liquidity coverage ratio, an important measure that was introduced after the Global Financial Crisis, which says that a bank should have enough very liquid assets to be able to manage outflows under a stress scenario. The third was a Basel standard on interest-rate risk that the U.S. Two of them applied to the largest banks but didn’t apply to Silicon Valley under the Federal Reserve’s so-called “tailoring rule,” which implemented a 2018 law passed by Congress. I thought it would be useful to focus on a specific and answerable question, which is: if specific regulations had been in place and enforced, would they have made a difference? One of the hot topics of discussion was whether regulation or deregulation had been a part of the problem.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |